TaxTMI 
TaxTMI 
Dear Sirs,
We are quoting for construction of 10500 sft private commercial building in Bangalore. The contracts and payments will be routed through our company.
May I request the members to please advice what are the taxes that are applicable under building construction services.
Thank you in advance.
Regards,
Taxes for building construction contracts
Jagadishwaran Guruswamy
Understanding Taxes on Commercial Construction: 14% Service Tax, 1% Cess, State VAT, and Local Clearances Apply A forum participant inquired about applicable taxes for a construction contract of a commercial building in Bangalore. Respondents advised that a service tax of 14% applies, calculated as 40% of the contract value. Additional applicable taxes include a 1% building construction cess, works contract tax depending on state VAT laws, and local municipal and environmental clearances. It was noted that post-2007, contracts considered works contracts for VAT are similarly treated for service tax purposes. The composition scheme with a lower service tax rate was withdrawn from July 2012. (AI Summary)