Suman Kumar Agrawal (Chartered Accountants) (226 Points)
28 July 2014My Client has taken Works Contarct for Construction of EWS Quarter from Housing Board,Area of Per Flat Below 60 Sq. Mt. Can He Take Service Tax from Housing Board?
Harendra Kumar
(Tax Advisor )
(1326 Points)
Replied 31 July 2014
Sir,
Service tax applicable on such taxable services under work contract as 50-50.
Vikas
(CA)
(1135 Points)
Replied 04 August 2014
Dear Suman,
Please confirm whether you are covered under the following or not
“low- cost houses up to a carpet area of 60 square metres per house in a housing project approved by competent authority empowered under the ‘Scheme of Affordable Housing in Partnership’ framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India;”
If yes, then you are exempted from Service tax vide Notification No.25/2012-ST dated 20 June 2012.
If no, then you need to understand, whether the Housing Board is covered under the meaning of ‘Government’. There is express definition of ‘Government’ provider under the Service tax law. As per clause (23) of section 3 of the General Clauses Act, 1897 ‘Government’ includes both Central Government and any State Government. It would include the Government departments. However, it would not include a statutory body, corporation or an authority created by the Parliament or a State Legislature.
Therefore, if the Board is considered as ‘Government’ then the service tax liability would be payable by you under reverse charge mechanism.
Otherwise, you may charge, collect and pay the Service tax.
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