Service tax rate & liability

This query is : Open

CA Sanjay Baheti (Querist)
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31 August 2012 One of my client being a Partnership Firm engaged in Construction Activities as Builder or Developer. It undertakes construction of 24 Residential House/Flats for Buyers who are Individuals.This Project is meant for Medium Class Persons.So nearly the Construction cost comes to Rs.8-10 lacs Approximately.After adding the Profit margin Builder/Developer makes Bill for each Buyer along with Sale Deed for registration purposes.Now in this scenario please give reply as to following queries:-

i) what will be Service Tax Rate to be charged.
ii) whether such services comes under RCM as per Service tax law.
iii) If covered under RCM then whether Service recipient is also subject to ST net or not.
iv) what will be ST rate to be borne both by Service Provider & Service Receiver.

Awaits an Early response.

CA Suresh Jain

CA Suresh Jain (Expert)
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02 September 2012 1. You should determine the value of service as per Service Tax (Determination of Value) Rules, 2006 as amended.
2. determine whether service is taxable or not - notification 25/2012
3. what is the % of service on which tax is payable by you as service provider - notification 30/2012
4. consider tax payable as per abatement notification 26/2012

now, decide what should you pay

Your Additional questions :-
1. since, service is provided to individual it does not comes under RCM
2. If this land belongs to all individuals separately and you are given a contract by individual person and you do not have any sort of interest in land, this service will be an exempted service. If full detail given a perfect answer could be given

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