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Tax implications of construction service

Rajat Agrawal (Practising Company Secretary) (433 Points)

08 March 2013

Dear CCI Friends,

I want to know the service tax implications on construction service where the builder, contractor and a customer is involved in a transaction.

Please help me clear my doubts on this.

Thanking in advance

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Giridhar S Karandikar (Team Lead) (7553 Points)
Replied 08 March 2013

If you are purchasing a flat from a builder after receiving the completion certificate then you are not at all liable to pay ST to teh builder. However if you have purchase a under construction flat and are paying advances to the builder then you would be liable to pay ST to the builder.

However if you have hired a contractor/builder on your own to construct a flat/plot/bungalow for yourself then in this case there would not be any ST liability because you are constructing the premises for yourself and is not for sale.

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