service tax on construction of resedential house

[RAM AVTAR]

Sir

What is applicability of service tax on CONSTRUCTION OF THREE STORIES Residential property ( single MAP Approved by town and planning commissioner ) not intended to sale to any one

Suppose a person plan to construct a residential property y which consist basement, Ground Floor, FF , SF and third floor as per approved MAP. ( Each floor has kitchen , bathroom )It is to be use by owner him self or by his family members ( may be each floor for his family members )

Clause no- 14. Of notification no 25/2012 dt 30/06/2012

Services by way of construction, erection, commissioning, or installation of original works pertaining to,-

(a) an airport, port or railways, including monorail or metro;

(b)a single residential unit otherwise than as a part of a residential complex;

(c) low- cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;

(d) post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes; or

(e) mechanised food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages

2.Definitions. - For the purpose of this notification, unless the context otherwise requires, –

(zc) “residential complex” means any complex comprising of a building or buildings, having more than one single residential unit;

(ze)“single residential unit” means a self-contained residential unit which is designed for use, wholly or principally, for residential purposes for one family;

FAQ of service tax

7.9.7 What is the service tax liability on construction of two - floor house constructed through a contractor? My contractor is demanding service tax. Is he right in doing so?

Service tax is payable on construction of a residential complex having more than one single residential unit. Single residential unit is defined in the notification and means a self-contained residential unit which is designed for use, wholly or principally, for residential purposes for one family. If each of the floors of your house is a single residential unit in terms of the definition, the contractor is rightly demanding service tax. If the title of each of floors is capable of being transferred to another person by mutation in land/ municipal records, both the floors may be considered as separate single residential units.

AI Summary

Service Tax Applies to Multi-Floor Residential Buildings if Each Floor is a Separate Unit Under Notification 25/2012 A query was raised regarding the applicability of service tax on constructing a three-story residential property intended for personal use, not sale. The property includes a basement, ground floor, first floor, second floor, and third floor, each with a kitchen and bathroom. According to notification 25/2012, service tax applies to residential complexes with more than one single residential unit. A single residential unit is defined as self-contained and designed for one family. If each floor is considered a separate unit capable of title transfer, service tax is applicable. The contractor's demand for service tax is justified if these conditions are met.