Applicability and liability of service tax

[Guest]

A builder who enters in to a development agreement with the buyer of the flat and receives advance payments for the same intends to pay service tax on the amounts received by him under WORKS CONTRACT services. The builder was earlier paying the service tax for the same under “construction of residential complexservices” .Is it obligatory for the builder to register such development contracts undertaken after 01.06.2007 with the local Sales Tax department for discharging their service tax liability under the newly introduced Works Contract services.

[Guest]

If Builders already paid ST under "Construction of residential complex services" and if would like to switchover to pay ST under "Works contract Services" for new projects, it is required to insert/amend the "Works Contract Services" in their ST registration and pay ST under the new service.{ in your draft you may written Sales Tax Dept. instead of Service tax Dept.- if not service tax payment not connected with Sales tax department }.

[Guest]

As per the Service tax Dept clarification, receipts of existing contracts entered into pre-1.6.07 should continue to be reported only the old category of say 'construction service'. Any new contract entered after 1.6.07 (after introduction of works contract service) may be reported under the new service in which case the certificat should be amended to include the service.

[Guest]

As per the Service tax Dept clarification, receipts of existing contracts entered into pre-1.6.07 should continue to be reported only the old category of say 'construction service'. Any new contract entered after 1.6.07 (after introduction of works contract service) may be reported under the new service in which case the certificate should be amended to include the service.

AI Summary

Works contract service: builders must amend service tax registration to report new contracts under that service. Builders treating new projects under Works Contract Service must amend their service tax registration to include that service and discharge tax accordingly; receipts from contracts entered into before the introduction of Works Contract Service should continue to be reported under the existing construction service category, whereas contracts entered after that date may be reported under the Works Contract Service once the registrant's certificate is amended.