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Construction service

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(Querist)
21 September 2015 Dear Sir,

Service Tax Issue in case of Construction Service

Four individual who have jointly held NA Land. Now they want to plan to construction on that. So that they have created partnership firm, now land is on partners name and firm is constructing the Flats and bungalows.

Can firm on behalf of partners receive Advance money on its name for flats and bungalows?

Now whether Work contract service (effective rate 5.60%) is applicable or construction of residential house service (effective rate 3.50%) ?

Is there any other way to reduce the service tax liabilities by tax planning ?
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Amol S Joglekar

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Amol S Joglekar (Expert)
21 September 2015 If the firm is empowered to receive advance money through developement agreement, then it can do so.

If the flats and bungalows are RESIDENTIAL, then the service tax is applied accordingly.
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