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Service tax on construction of residential units
My firm is in the business of residential apartment construction. I am paying service tax under the service - construction of residential complex and paying service tax on 33% of the value without considering the land value. Recently the service tax audit team inspected my books and passed an order stating that I have to pay service tax under the service works contract , as I am registered under commercial tax department under works contract , with an abatement of 60% on the total value(including land). Can somebody suggest me a solution as it is a burden to pay tax on 40% on the total value (including land)
Replies (1)
If you own the land and such land rights are being trsfd at time of sale to buyers, then you shall pay service tax only on 25 / 30% of the total value; else your auditor is correct, you shall pay Service Tax on 40%Value.
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