WHAT IS SERVICE TAX PAYABLE?

[rajkumar shukla]

X, a builder cum owner of land constructed multi-storeyed residential flats by hiring labours, valued at Rs. 10.73 crores as ascertained by government approved valuer in May,2010. According to certificate issued by said Architect cum Valuer, construction started in February,2008 and 80% work was completed by May,2010.The builder submitted information to this fact in Range office in July,2010 along with above certificate of valuer when explanation regarding deemed service provision was added in the definition of construction service. Remaining 20% construction work completed after july,2010. Builder receives 80% of flat price from prospective buyers after July,2010 and propose to take rest 20% at the time of registry in April,2010. On what amount service tax is payable.

AI Summary

Service Tax Implications on Residential Flats: Understanding Abatement and Taxable Amounts Post-Finance Bill 2010 A builder constructed multi-storeyed residential flats, completing 80% of the work by May 2010, with the remaining 20% finished after July 2010. The query concerns the service tax payable on the construction. A respondent noted that the High Court of Mumbai stayed the imposition of service tax on deemed services as per the Finance Bill 2010, exempting advances paid before July 1, 2010. If the Agreement to Sell includes land and construction costs, a 75% abatement is allowed, making only 25% of the agreement value taxable. Another participant suggested that service tax is payable only on the 80% amount.