Service tax on works contract for construction resident unit

Sir,

Service tax applicable on such taxable services under work contract as 50-50.

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.