Payment of service tax - under different category

[Deepak Goel]

If a person who is paying service tax on a Construction of Residential Complex, now he wants to change the option to pay Service Tax under Work Contract on the said project OR this is applicable only on new work contract OR he can terminate the said contract and sign again for balance work and pay service tax under Work Contract Scheme. Deepak Goel Mob No. 9818112228

AI Summary

Switching Service Tax Category: Challenges and Considerations under Works Contract Rules, 2007 with Tax Evasion Risks A person inquired about changing the category for paying service tax from 'Construction of Residential Complex' to 'Work Contract' for a project. One response highlighted that under the Works Contract (Composition Scheme for payment of Service tax) Rules, 2007, a 2% option could be chosen before any tax payment, effective from June 1, 2007. Changing categories after payment is challenging, and entering a new contract might not be feasible. Another response mentioned the possibility of terminating the existing contract and starting a new one but advised caution due to potential tax evasion implications, referencing the McDowell case.