Construction of Residential complex

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S.M.Gulati

S.M.Gulati (Querist)
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06 December 2010 Whether gross amount includes fire fighting charges , prime location charges , and many other charges similar to that which a builder charge from its customer ?

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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07 December 2010 Yes , In gross amount these charges will be included.

S.M.Gulati

S.M.Gulati (Querist)
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07 December 2010 Thank u for ur reply. But can u provide any circular or notification means any kind of support for this statement? Highly obliged if u can.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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08 December 2010 Finance Act 2010 has effective from 01-07-2010 re-levied the service tax on Construction Services - Residential Complex Services and has clarified that a residential complex should comprise of more than twelve units and only in case the entire consideration is received after issuance of completion certificate by the competent authority would the activity of construction not be deemed to be a taxable service. In other words, where payments are collected in instalments from the buyer, the construction activity would be deemed to be a taxable service.

By applying the provisions of Section 67 of the Finance Act, 1994 the value of taxable service read with Service Tax (Determination of Value Rules),2006, the value of taxable service would comprise of "all consideration received in money".

Hence amounts including fire fighting charges , prime location charges , and many other charges similar to that which a builders charge from its customers in money would all form part of the value of taxable service.

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