Applicability of Service Tax

This query is : Resolved 

22 July 2010 Sir,

XYZ as a Company under CSR (Corporate Social Responsibility) wanted to constuct a Hospital in a near by Villages.
XYZ is giving contract to ABC Contractors for constuction of such hospital building.
Contract is between XYZ and ABC for constuction of the Hospital building.
Finally after completion of the Hospital building XYZ is going to hand over to Govt/ Villagers.

1st Transfer of property of the building transfers from contractor to XYZ.
Later Transfer of property of the building may transfer from XYZ to Govt.

My question is applicability of the Service tax or any other Tax for the ABC contractors for construction of the Hospital building ?.

If service tax is applicable at what rate ? is there any abatement or exemption for that ?

22 July 2010 it will depend upon the agreements between contractor and contractee and govt., if hospital will be used for commercial purposes service tax will be applicable otherwise not


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