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 building construction: provider primarily liable; receiver may need to deposit a portion and limited input credit applies. Service tax liability for building construction is primarily on the service provider, while the service receiver may be required to deposit a portion of the tax in works contract situations when the provider is not a corporate. No input credit is available for construction works, but credit may be available for separately billed installation of machinery, electrical works, furniture and interior services.