Service Tax on Real estate after 2010-111 budget

Hi,

In my opinion, the explanation has been inserted now in order to expand the scope of the service & hence will be applicable only after the passing of the budget.

The consideration paid for the service already rendered before it become taxable can not be logically subjected to tax. So only the amount which is paid relating to the service rendered after the passing of the Budget, in my opinion will be subjected to tax.

Further, the residential complex in which such flat has been purchased must have more than 12 flats, then only such service will become taxable as it is not a new service but an explanation to the already existing service.

Going further, the abatement of 66% may also be available for such service vide Notification No. 1/2006 Item No. 10.

Lastly, whether or not the Completion certificate is received before the passing of the budget per se may not have any impact on the taxability of service as the thrust is on payment of part / full consideration before receiving the completion certificate. However there is good chance to argue that since the completion certificate has already been received, the entire service has been provided even though the payment is belated & hence it should not attract service tax.