Construction contracts

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2015 I am an individual working in my individual name.i got a total sum of Rs 50 lakhs as an advance(which is the total consideration as well)from another individual to build his house
1.when will my liability to service tax arise
2.will i get the initial abatement of Rs 10 lakh.

3.will i be liable to pay service tax @ 3.5% +cess @ 3% or what amount on Rs 50,00,000/- or Rs 40,00,000/- or it is deemed that this contract includes service tax and i have to calculate tax accordingly
an early reply will be a great help
4.i am not already into any business with service tax liability.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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28 July 2015 1 Liability to service tax arises as soon as the payment is received, get registered with service tax and remit it on line before 6th of the ensuing month.
2 You need not pay service tax on first 10 lacs.
3 You need to pay service tax at 14% on 25%(carpet area less than 2000 sq feet) of 40 lacs.

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