Rate applicability in composite scheme

[Anup Kumar Grover]

A company is engaged in the construction of residential building (consisting 4 flats), carried on as construction contract including materials, what is rate of tax in normal and under composition scheme, if possible prescribe the required procedure

AI Summary

Company Seeks Clarification on Service Tax Rates: 10% Under Normal Scheme, 4% Under Composition Scheme for Construction Contracts. A company involved in constructing a residential building with four flats seeks clarification on the applicable service tax rate under normal and composition schemes. The response indicates that under the normal scheme, the service tax rate is 10% if the material value is deducted from the gross amount. Under the composition scheme, the tax rate is 4%. For new contracts opting for the composition scheme, the value of free materials used in the construction must be included.