Service tax on construction contracts..

This query is : Resolved

CA.Hariharan M.P. (Querist)
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01 November 2012 Hi,

I am working in a Charitable trust which is running hospitals and educational institutions. We are constructing buildings for new hospital and colleges. Before the introduction of recent finance bill, there were no service tax is charged by the contractor. Now he demands service tax also claiming that negative list does not include construction contracts. Earlier when it was declared service, only commercial constructions are attracted by service tax. Whether there is any change in the status? whether the claim of the contractor is correct as per Act?

MANOJ KUMAR SHARMA

MANOJ KUMAR SHARMA (Expert)
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01 November 2012 in my views contractor will claim from you charitable trust is exempt under the service tax now but as a SR it is liable to pay the tax

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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01 November 2012 No ST Paid by Trust Registered Under12 AA of IT Act.
Since in This Case You are Service receiver, so You are Not Exempted From Service Tax.
As a Service provider You are Exempted But Not as Service receiver.
You Need to Pay ST.

CA.Hariharan M.P.

CA.Hariharan M.P. (Querist)
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01 November 2012 Thanks for the replies. But still there is ambiguity regarding the liability of service tax...

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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02 November 2012 Now Where is The Ambiguity.
U r Receiving Service, You Have to Pay ST Charged in Invoice, Not to Goverment

CA.Hariharan M.P.

CA.Hariharan M.P. (Querist)
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02 November 2012 Whether construction service received by a charitable institution is liable for service tax ??

CA Ayush Agarwal

CA Ayush Agarwal (Expert)
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02 November 2012 Its in Negative List 12/2012.
Read 13th Negative Item in List.

"building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general public;"

If As Above mentioned Condition Exist, Then Contractor Cant Charge Service Tax & You Have To Show to Him This Notification.

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