Service tax on extra work service provided by builder

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This query is : Resolved

Rakesh Bandal (Querist)

15 January 2014 sir/madam
Whether service tax is chargable on amount received towards extra work provided as per request of customer by builder of residential complex. whether chargable under Works contract with abetment

Harsh Gadodia

Harsh Gadodia (Expert)

15 January 2014 Any service rendered by the builder would be liable to service tax provided it falling under the ambit of the definition of the service. Moreover, construction works covred in declared service sec 66E.
Even the extra work performed by the builder is not mentioned in the agreement, until and unless, the builder is receiving the consideration for the work performed would be liable to service tax.
To liable under works contract it has to satisfy twin condition-
1. There is a transfer of property in goods involved in execution of works contract .
2. such goods is leviable to sales tax.

for example in case of preferential location, builder charges separate amount from the buyer. It would be liable to service tax only and not VAT as there is no transfer of property involved.

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Rakesh Bandal

Rakesh Bandal (Querist)

19 June 2014 Thank you sir, for your valuable response

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