Service tax due in case of real estate co.

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Querist : Anonymous

Querist : Anonymous (Querist)

08 October 2011 My Client provides services in the category of Construction of Residential Complex Service. Customer books his villa and gives advance money to the company depends upon the stage of completion.When Certain percentage of work complete, instalement is due. I want to know that this instalement due is treated as service provided or not. Some customer deposite the money at time and some other delayed in payment of instalement ( In some cases delayed period is 6 to 8 Month ). When service tax is payable by Company,On Instalement due or payment receive ? I Know that Accural System is incorported in Service tax w.e.f 1St April 2011.If we receied. If we received the payment of instlement due ( which is before 1.4.11 and payment received after 1.4.2011.)Pls give the advice on this matter

CA PRAVIN

CA PRAVIN (Expert)
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08 October 2011 Notification No.25/2011 – Service Tax

Service tax is due when installment is due or received whichever is earlier.

In case of Real Estate firms, when the firm receives the instrallment from customer or installment is due whichever is earlier is point of taxation.

U consider the accounting policy of firm. When the agreement is taken place, when the possession is given to customer.

Payment received before 01-04-2011, service tax should be paid as per earlier provisions i.e on receipt basis.

CA PRAVIN

CA PRAVIN (Expert)
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08 October 2011 In our firm, we book sale at the time of agreement i.e.at the time of receipt the amount of 10% by customer. At that time we record service tax liability.

ACMA Obulirajan R

ACMA Obulirajan R (Expert)
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08 October 2011 Billed before 1.4.11 and payment received after 01.04.11, then the liability is on receipt of the amount.

Payment Received before 01.04.11 and billed after 01.04.11, then the liability is on receipt of the amount

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