Service tax on construction

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2016 Sir,

There are 4 vacant plots owned by 4 different individual in same vincinity.

They all have approached contractor to build residential building for their own purpose.

Contract is for material and labour both.

Whether service is required to be charged by contractor on the same and if yes, notification no 8/2016 on 1st march 2016 stating 70% abatement can be taken by contractor for discharging his dues ? As notification clearly states, that the value of land is to be included in taxable services, but here only land belongs to plot owners and contractor is specifically approached for construction services only.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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01 December 2016 Service tax is applicable on 40% of construction cost excluding land value. If all the four house is constructed by 4 different contractors no service tax applicable.