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Construction contract

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This query is : Resolved

Balarama.p (Querist)
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05 January 2013 Whether the Service Tax on Construction contract is payable on Accrual basis and that too on the basis of Construction cost incurred till date with effect from 01.04.2012 ? Instead of of Receipts basis by the Develoeprs ?

Kaushik Vinod

Kaushik Vinod (Expert)
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06 January 2013 Dear Balrama,

In case of continuous supply of service where the provision of the whole or part of the service is determined periodically on the completion of an event in terms of a contract, which requires the receiver of service to make any payment to service provider, the date of completion of each such event as specified in the contract shall be deemed to be the date of completion of provision of service;

Service tax shall be payable earlier of the two events:-
Issue of Invoice OR Receipt of Payment

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