whether service tax on the services acquired for commercial construction(inputs for commercial construction) is payable when the commercial service is exempt?
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Service tax
Replies (4)
No service Tax liability in the hands of the assessee.
Service tax will be leviable as construction contract is a taxable service. It makes no difference that the services provided from that commercial establishment/ costruction is exempt. However 75% abatement is available if the contract is material cum service. So effective service tax rate will be 10.3 * 25% i.e. 2.575%
The exemption from ST for the output service does not affect the taxability of the input services. They would contineu to be taxable or exempt if any notifcation applicable. Therefore even for road contracts the telephone, insurance, manpower supply etc input services would be liable.
I would like to know whether service tax be levied in case of a proprietorship concern in construction business, doing construction of building for a hotel under an agreement.
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