DEDUCTION LIMIT ON LABOUR BILL OF BUILDING CONSTRUCTION

[nandankumar roy]

DEAR SIR,

WE HAVE CONSRUCTED NEW BUILDING FOR MFG PURPOSE NOW TIME ARISE FOR SATTLEMENT OF FINAL PAYMENT . IF LABOUR BILL IS UNDER 8 LACS TURN OVER AS PARTY AGREED TO GIVE DECLARATION ON RS 10 STAMP PAPER  WHETHER SERVICE TAX WILL BE APPLICABLE OR NOT.IN CASE OF APPLICABLE WHAT WILL BE DEDUCTION PROCEDURE. PL CLARIFY.

[YAGAY andSUN]

If the amount of taxable service is below the  threshold limit ( i.e. Rs. 900000 for registration and Rs. 1000000 is for charging of tax), then no service tax will be chargable. An affidavit from the provider of the services in this matter will be sufficient. 

 

AI Summary

Service tax not applicable on construction labor bills under Rs. 10 lakhs; affidavit on Rs. 10 stamp paper suffices. A query was raised regarding the applicability of service tax on a labor bill for building construction, with a turnover under 8 lakhs. The inquirer asked if service tax would apply if a declaration was provided on a Rs. 10 stamp paper. The response clarified that if the taxable service amount is below the threshold limit of Rs. 9 lakhs for registration and Rs. 10 lakhs for charging tax, no service tax is chargeable. An affidavit from the service provider would suffice in this situation.