Service Tax : Amid of all this steps an amendment has also been made under service tax laws relating to valuation of Construction Service. The r...
Service Tax : Under the new regime of service tax i.e after 01.07.2012 service tax on construction service is explained u/s 66 E(b) i.e. declare...
Service Tax : Decision given by Delhi High Court is for a period prior to July 2012. From July 2012 with introduction of Negative List, all the ...
Service Tax : CA Nikhil M. Jhanwar Decoding Judgment of Delhi HC on Service tax in case of Under-Construction Flats Real estate industry has bee...
Service Tax : We have a lot of verdicts and planning’s as discussed above, but due to the length constraint of a single article, we will be sh...
Service Tax : No Service Tax on Transfer of Immovable Property if entire consideration received after issue of Occupancy Certificate. In order t...
Service Tax : In a decision that might have an impact on realty prices, the Bombay High Court has upheld the decision of the Union government to...
Service Tax : A division bench of the Gujarat high court, headed by chief justice SJ Mukhopadhaya, has issued notices to the Union finance minis...
Service Tax : The Maharashtra Chamber of Housing Industry (MCHI) has said it is hopeful of an early decision on the service tax issue. The secon...
Service Tax : Builders are all set to legally challenge the imposition of the service tax levied by the Centre on flats under construction. The ...
Service Tax : CESTAT Ahmedabad ruled that construction of new buildings or civil structures as turnkey projects falls under Works Contract Servi...
Service Tax : Thus, while the legislative competence of the Parliament to tax the element of service involved cannot be disputed but the levy it...
Service Tax : The Bombay High Court has granted an interim stay on collection of Service Tax levied on buildings under construction, following a...
Service Tax : Construction of a complex intended for sale by the builder before, during or after construction is deemed to be a service provided...
Service Tax : According to the CBEC Education Guide on Taxation of Services, 2012 value of construction service provided to such land owner will...
Service Tax : It has been 'mentioned that many builders charge additional amount known as "floor rise charges" in addition to the normal sale p...
The finance ministry may exclude land value from the ambit of a new tax on under-construction houses, potentially taking the sting out of the proposed levy after it ran into a storm of protests from the real estate sector and exposed fissures within the government. The 2010-11 budget has proposed a 10% service tax on 33% of the total cost of under-construction houses, which could increase the price tag of such properties by 3.3%. The new tax will come into effect once the budget is approved by Parliament.
An eye on compensation for revenue losses and tough posturing have marked positions taken by some states as they buckle down for another round of negotiations on the transition to a goods and services tax (GST). The fear of losing autonomy over levy of taxes has led to some states striking a tough stance against the GST architecture suggested by the 13th Finance Commission (TFC).
Thus, it is clear that that the realty sector has been worst hit by this year budget. Even this was explained by us in our power point presentation on the budget. This explanation will bring every builder in ambit of service tax. The retrospective amendment of renting has added fuel to the fire. The Finance Ministry has not waited for the outcome of the verdict of Supreme Court and has proposed this amendment to nullify the impact of Delhi HC decision in case of Home solutions.
The Urban Development Minister, Mr Jaipal Reddy, will soon take up with the Finance Ministry, the contentious issue of service tax imposition in the real estate sector proposed in the Budget. This assumes significance as the service tax imposition can translate into a three-four per cent increase in the cost of under-construction apartments for most home buyers.
Home buyers and property developers need not worry about being levied a service tax if they cannot procure a completion certificate from the local authority. The government could allow some independent authority to certify that the property is complete.
Industry body Assocham has asked the government to roll back the service tax proposed on real estate developers at the time of construction, as it would increase the tax burden on home buyers and impact the recovery of the sector. The government, in the Budget, said that real estate complexes will attract service tax, unless the entire consideration for the property is paid after the construction is complete.
construction of a new building which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or the person authorised by the builder before grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force ) shall be deemed to be service provided by the builder to the buyer.
The Union Budget proposes to expand the definition of construction service and levy tax on houses under construction as well. The new rule, which will come into effect when Parliament approves the budget, says service tax would be imposed if payments were made before the completion of construction.
The Budget proposals have thrown up a dampener for the housing industry. Construction services have now been brought under the ambit of the service tax in an unexpected move that would raise cost of apartments that are still under construction.
