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service tax changes for under construction housing

Sanjay Rustagi (PM) (32 Points)

30 July 2016

please confirm if service tax payable to builder has increased to 4.35% instead of earlier 3.625% wef from 1.04.2016

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K.RAJA (Tax Consultant) (217 Points)
Replied 31 July 2016

Dear Sanjay,

W.E.F. 01.04.2016

(i) For High end Residential unit having carpet area more than 2000 sq.ft (or) where the amount charged is Rs.1 crore or more., - TV-30% ABT- 70% ETR-4.5%

(ii) Construction other than the above - TV-30% ABT- 70% ETR-3.5%

(iii) Construction of Commercial complex/Building/Civil Structure - TV-30% ABT- 70% ETR-4.5%

Conditions:

(i) Cenvat credit on inputs used for providing the taxable service has not been taken under the provisions of the CCR 2004.

(ii) the value of land is included in the amount charged from the Service Receiver.

Note: TV - Taxable Value, ABT-Abatement, ETR-Effective (Net) Tax Rate

Sanjay Rustagi (PM) (32 Points)
Replied 31 July 2016

hi Raja, it was 3.625% before and I came to know after searching sites that govt now changed abt rate uniformaly at 70%.30% I need to know from which data this is effective

K.RAJA (Tax Consultant) (217 Points)
Replied 31 July 2016

Dear sir,

Please refer Abatement Notification No.26/2012-ST dated 20.06.2012 as amended Notification No.8/2016 serial no.1 (a) (ix) and this rate is applicable from 01.04.2016.

Abatement for the taxable service of Construction for commercial or residential unit intended for sale to a buyer wholy or partly is 70% and the Service provider needs to pay Service tax on 30% of the value charged for such service.