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.

AI Summary

Builders Switching to 'Works Contract Services' Must Amend Service Tax Registration for New Projects; Pre-2007 Contracts Unaffected. A builder who has been paying service tax under 'construction of residential complex services' intends to switch to 'Works Contract Services' for new projects following a development agreement with a buyer. The query seeks clarification on whether it is necessary to register such contracts with the local Sales Tax department for service tax purposes. Responses indicate that if builders wish to switch to 'Works Contract Services' for new projects, they must amend their service tax registration accordingly. Contracts entered before June 1, 2007, should continue under the old category, while new contracts should be reported under the new service.