Service tax on construction services

This query is : Resolved

DHAIRYA HARKCHAND DEDHIA (Querist)
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24 May 2012 After the Ho'ble Mumbai Court verdict how the service tax liability will be discharged and how the following issues will be resolved?

1) If the Builder is paying 1% VAT then would the service be covered under Works Contract for the purpose of Service tax?

2) How the interest and penalty would be levied on service tax after 1.7.2010 that is will it have retrospective effect?

Kindly revert back on these issues.

Thank You

Jigar

Jigar (Expert)
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24 May 2012 Dear Dhairya,

I would be difficult for the assessee to classify himself different category in VAT and in Service Tax. If the assessee classifies himself as Builder for VAT purpose then he will have to be classified under Construction of Complex or Construction of residential complex, as Builder and works contract are both assigned different meaning in both the laws.

Practically speaking, the penalty and interest will be levied from 01.07.2010