service tax on builders

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rajeev khulbe (Querist)
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04 June 2010 i want to start the business of constructing and selling of bunglows. whether service tax will be applicable on the consideration to be received from the final consumer?
If yes how the service tax will paid? whether as and when i receive the instalments or otherwise as and when i am recognising the revenue?

Shyam Lal Naik

Shyam Lal Naik (Expert)
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04 June 2010 As per the recent amendment, if you collect any amount from the prospective buyer, before obtaining completion certificate, construction of complex, shall be a taxable service, else not.

Construction of complex means, a complex consisting of 12 or more residential units having few common facilities.

Service tax shall be paid, as and when instalments are received.

An abetment of 67% of the value is available, subject to specified conditions.

Would like to see more opinion.

CMA Arif Farooqui

CMA Arif Farooqui (Expert)
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09 June 2010 agreed with expert but abatment rate is increase to 75 % by Finance Minister when finance Bill 2010 passed

Shyam Lal Naik

Shyam Lal Naik (Expert)
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10 June 2010 Just to add :

The abetment of 75% is conditional. It is available only if the gross value includes cost of land as well.

CMA Arif Farooqui

CMA Arif Farooqui (Expert)
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10 June 2010 Mr. Shyam. i want to know that.
is this mean every flat purchaser will not get 75 % abatment?
may u sent any circular/notification on this topic, if any
my id is arif_cwa@yahoo.co.in

Shyam Lal Naik

Shyam Lal Naik (Expert)
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11 June 2010 Dear Arif,

The necessary notification is yet to be issued.

For the time being the following link may be referred.

https://www.taxguru.in/budget-2010/finance-bill-2010-11-construction-industry-gets-service-tax-concession.html

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