TaxTMI 
TaxTMI 
Is service tax is applicable for villa projects?
Service Tax Liability on Villas
30 Jan 2012 
12 Replies 
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Service tax on construction of residential complex: payments received before completion certificate attract tax, with abatement or cenvat options.
Construction services are taxable where a project meets the definition of a residential complex (generally more than twelve residential units with common areas and facilities) or where the builder receives payment from a buyer before issuance of a completion certificate by a competent authority. Payments received prior to completion certificate are deemed services by the builder to the buyer and taxable from the 2010 amendment; exemptions include complexes of twelve or fewer units, sales after completion certificate with full consideration received post completion, certain public housing schemes and receipts predating the amendment. Builders may elect abatement (with corresponding Cenvat disallowance) or tax the value of services and claim Cenvat credit; compliance obligations include registration, invoicing, timely payment, returns and recordkeeping. (AI Summary)
Construction services are taxable where a project meets the definition of a residential complex (generally more than twelve residential units with common areas and facilities) or where the builder receives payment from a buyer before issuance of a completion certificate by a competent authority. Payments received prior to completion certificate are deemed services by the builder to the buyer and taxable from the 2010 amendment; exemptions include complexes of twelve or fewer units, sales after completion certificate with full consideration received post completion, certain public housing schemes and receipts predating the amendment. Builders may elect abatement (with corresponding Cenvat disallowance) or tax the value of services and claim Cenvat credit; compliance obligations include registration, invoicing, timely payment, returns and recordkeeping. (AI Summary)