Advocate Santosh Kumar
One of the Changes made vide the Finance Bill. 2013 in the area of service tax is the rationalization of abatement regarding construction. In his budget speech Finance Minister P. Chidambaram mentioned that “Homes and flats with a carpet area of 2,000 sq.ft. or more or of a value of Rs. 1 crore or more are high-end constructions where the component of ‘service’ is greater. Hence, I propose to reduce the rate of abatement for this class of buildings from 75 percent to 70 percent. Existing exemptions from service tax for low cost housing and single residential units will continue.”
In the regime of Negative List a fresh Notification No. 26/2012-ST dated 20.06.2012 related to abatement was issued w. e. f. 1st July, 2012 in which among other services value of construction services for leviability of service tax has also been mentioned.
To give effect to the proclamation of the Finance Minister, a Notification No.2 /2013 – Service Tax dated 1st March, 2013 has been issued to amend the Notification No. 26/2012-ST dated 20.06.2012.
Amended Provision of the Notification No. 26/2012-ST dated 20.06.2012 reads as follow:-
| Sl. No. |
Description of taxable service |
Percentage |
Conditions |
| 12. |
Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly except where entire consideration is received after issuance of completion certificate by the competent authority,- (i) for residential unit having carpet area upto 2000 square feet or where the amount charged is less than rupees one crore; (ii) for other than the (i) above. |
25
30 |
(i) CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004;
(ii) The value of land is included in the amount charged from the service receiver.”. |
