Claim of Service tax on Construction of Building

[Bhairob Chandra Bor]

Dear Sir,

Can you please advice for whether service tax cab be availed on service tax paid against construction of building through contractor. we have started to make a factory cum office building. cost breakup are Structure/Civil Rs.5.5 Cr, Electrical ,furniture and interior Rs.5.0 Cr. Also advice for who is liable to deposit the said service tax to the government.

Thanks & Regards

BCB 

[Madhukar N Hiregange]

Service provider liable to ST primarily. However in case of works contract and the service provider is not a corporate then the service receiver is to deposit 50 percent . of the tax due [ normally 2.5 percent ] Where SP has discharged then may not be reqd.

No credit on construction but the installation of machinery etc if separately billed - credit maybe available.

AI Summary

Service Tax Liability on Construction: Service Provider Primarily Liable; Service Receiver Pays 50% if Provider is Non-Corporate. A user inquired about the applicability and responsibility of service tax on the construction of a factory and office building, with a cost breakdown of Rs. 5.5 crore for structure/civil work and Rs. 5.0 crore for electrical, furniture, and interior work. The response clarified that the service provider is primarily liable for the service tax. However, in a works contract where the service provider is not a corporate entity, the service receiver must deposit 50% of the tax due. No credit is available on construction, but credit may be available for separately billed machinery installation.