Who if anyone is liable for Service tax under construction of complex service ?
Question asked by Chetan from Dallas, Texas:
Whether Service tax is liable under construction of complex service [section 65(zzzh)] on builder, promoter, developer or any such person—
(a)Â Who gets the complex built by engaging the service of a separate contractor, and
(b)Â Who builds the residential complex on his own by employing direct labour?Â
Vatsala Answers:
Clarification
a) In a case where the builder, promoter, developer or any such person builds a residential complex, having more than 12 residential units, by engaging a contractor for construction of the said residential complex, the contractor in his capacity as a taxable service provider (to the builder/Promoter/developer/any such person) shall be liable to pay Service tax on the gross amount charged for the construction services under construction of complex service [Section 65(105)(zzzh)
b) If no other person is engaged for construction work and the builder/promoter/developer/any such person undertakes construction works on his own with out engaging the services of any other person, then in such cases,-
• Service provider & service recipient relation ship does not exist.
• Service provided is in the nature of self-supply of services.
Hence, in the absence of service provider & service recipient relation ship & the service provided are in the nature of self-supply of services, the question of providing taxable service to any person by another person does not arise.
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January 5th, 2008 at 8:48 AM
Hi,
I have one more question related to this topic.
If a builder involves more than one contractors, then who will be paying the service tax?
Thanks & regards,
Anshul
February 28th, 2008 at 7:46 AM
Vatsala Answers:
The service tax is payable by both proportionate to the work done.
http://atoneplace.com
September 22nd, 2008 at 12:22 PM
Hii,
I have a work of construction of school building .
The money which I will be received , Does it taxable ?
thanks
June 30th, 2009 at 4:32 PM
If you are receiving the money as a donation, it will be exempted from tax, provided you have clearance certificate from the tax authorities and you are registered as a charitable trust and is a donation.