How much service tax on construction of own house should i ?
Querist : Anonymous
I am building a new house on my own land in Gurgaon, Haryana. For this, i have employed a contractor for finishing purposes, as structure is already done. Finishing includes woodwork, flooring, painting, plaster, installation of light and sanitary fixtures, waterproofing etc.
In my contract, areas and works to be done and their rates have been clearly mentioned and agreed. The make/brand of granite, stone, marble, wooden boards etc have also been agreed. The agreed rates include cost of material and lobour.
The contractor has been paid some advance, and raises a bill to me after every few lakhs with details of work done. Work done is inclusive of material and labour/installation charges. I deduct the advance on every bill. The contractor gives me the gross bill amount, and adds service tax of 14% on every bill. Tis bill is verified by my architect first, and only then paid by me.
My query here is, am I supposed to pay service tax on the entire bill amount? If the bill is being raised for labor and material together, then shouldn’t I be paying service tax on the labour component only? How much would that be? I believe the law is 40% of contract bill raised should attract service tax only? If so, what is the law/ section I should communicate to my contractor for his reference, as there would be some argument on this. Does the word "renovation" have any significance while raising bill as below ? In the actual contract, it mentions the contractor is being used for construction and interiors.
Thank you so much for your help.
Sample bill raised by contractor as below:
Contractor name and Private limited company details with service tax and pan card no
To,
Mr Aditya
Running bill for Mr Aditya for renovation of house
Address :no XX
Gross amount : 100000
Add service tax 14% : 14000
Total amount to be paid: 114000
Enclosed : details of works done
Signed by director of Private limited company.
Querist : Anonymous
Querist : Anonymous
No tax except VAT payable on purchase of building materials.
See item No. 14 of mega exemption notification 25/2012 service tax.
Querist : Anonymous
the contractor is buying the material and then installing/ fixing/ laying it. i pay for full value of bill raised (material and labour charge). so i would now only pay VAT on material and no service tax on the labour component ? i would need to ask for bills of material purchased for calculating how much VAT to be paid ?
Querist : Anonymous
This finishing work is part of construction of residential house hence exempt.
Querist : Anonymous
Querist : Anonymous
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