CONSTRUCTION OF RESIDENTIAL QUARTERS UNDER POWER GRID

[DEEPAK SHARMA]

Dear Forum people,

On of the our client is working as contractor, they offered a contract form power grid corporation of india to construct the residential quarter (the word is not residential complex as per work contract deed), it is bring under your attention that whether the service tax is applicable on this contruction of residential quarter or exempt from the entire service tax.

[Vijay kumar]

Dear sir, if it is works contract, service tax is payable under Works Contract Service under sub-clause "Residential Complex", which means a complex having more than 12 residential units in a common area having any one of the common facilities specified. If the complex consists of more than 12 units and is a located in a common area with common facilities such as park, likt, parking space etc, then service tax is payable under the said service. There is no exemption for contracts executed for Undertakings like Power Grid Corporation of India etc. 

AI Summary

Works Contract Service: service tax applies to construction of residential complexes exceeding specified unit threshold with common facilities; no exemption
Service tax is chargeable under the Works Contract Service classification where the contract results in a Residential Complex that meets the prescribed unit and common-facility criteria; no general exemption applies solely because the contract is with a public or statutory undertaking.