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Rate of service tax on commercial construction service (Service Tax)

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This query is : Resolved

( Author )
01 June 2012

Plz clarify whether there is different rate of service tax i.e other than 12.36% applicable to Commercial Or Industrial Construction service? If yes then what is the rate of Tax?


( Expert )
02 June 2012

Valuation on construction of complex /Building
Principally, service tax is payable on value of taxable services.
Thus, if a service provider has proper costing records, it is permissible to deduct value of material and land (or calculate value of service on cost plus profit basis) and pay service tax on value of service @ 10.30%.
If this is not feasible, then tax is payable @ 10.30% on 25%/33% of entire value of contract including material (used by builder plus supplied free of cost by customer), but then Cenvat credit is not available, as explained below.
(a) on 33% of gross amount charged if the gross amount does not include value of land
(b) on 25% of gross amount charged if the gross amount includes value of land (Till 1-7-2010, the 25% scheme was not available. Only 33% scheme was available).


( Author )
02 June 2012

Thank you dayal



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