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Service tax on construction contract

chaitrali m (Student CA Final ) (33 Points)

06 June 2016

PART PAYMENT IS PAID BEFORE COMPLETION & BALANCE AMOUNT IS PAID AFTER COMPLETION. HOW TO CALCULATE SERVICE TAX ? WHAT WILL BE ASSESABLE VALUE?

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5 Replies

SHRAWAN KUMAR YADAV (CA FINAL-M.COM) (58 Points)
Replied 06 June 2016

As per the sec.66E(b) only the amount paid before issue of completion certificate by competent authority is relevant . so only amount before completion is included in Assessable value.

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 07 June 2016

Since the entire payment is not made before issuance of completion certificate by competent authority hence only that part of payment which is made before issuance of completion certificate is liable for service tax(only on the service portion)

shivam agarwal (ca student) (175 Points)
Replied 07 June 2016

Whole amount is chargable to ST

Rahul Verma (CA-Final) (484 Points)
Replied 07 June 2016

As per the provision of service tax:

If you paid any consideration on or before completion or issue of completion certificate of construction then the same is liable to service tax. On the other hand if consideration is paid after completion then the same is considered as sale and not liable to service tax.

On ther other hand there is and abatement of 75% and 70% and balance is taxable i.e. Assessable Value depending on consideration i.e. 1 Cr and Sq Feet 2000.

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karan jit singh (Consultant) (1299 Points)
Replied 11 June 2016

Originally posted by : chaitrali m
	PART PAYMENT IS PAID BEFORE COMPLETION & BALANCE AMOUNT IS PAID AFTER COMPLETION. HOW TO CALCULATE SERVICE TAX ? WHAT WILL BE ASSESABLE VALUE?