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Navigating Service Tax on Construction: A Comprehensive Guide

Understand service tax implications in construction industry, including abatements, site formation, residential complexes, and works contracts. Stay informed on recent amendments and key court cases. Visit our website for more information.

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Navigating Service Tax on Construction: A Comprehensive Guide

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  1. SERVICE TAXon construction industrybyg. natarajan advocate, swamy associates

  2. Commercial or industrialconstruction service… • 10.09.2004. • Primary use for commerce / industry (NCC-GWSSB 2010-tiol-789). • Exclusion for roads, airports railways, transport terminals, bridges, tunnels & dams.

  3. Commercial or industrialconstruction service… • Circular No.116/10/2009 Dt. 15.09.2009. • Abatement. Notification 15/2004 & 1/2006 • Extended to finishing services w.e.f. 16.06.2005. No abatement.

  4. Commercial or industrialconstruction service. • Explanation. - For the purposes of this notification, the “gross amount charged” shall include the value of goods and materials supplied or provided or used by the provider of the construction service for providing such service. • Cemex Engineers Vs CCE 2010 (17) STR 534. Jaihind Projects – 2010-TIOL-124.

  5. Site formation service… • 16.06.2005. • site formation and clearance, excavation and earthmoving and • demolition” includes, — • drilling, boring and core extraction services for construction, • geophysical, geological or similar purposes; or • (ii) soil stabilization; or • (iii) horizontal drilling for the passage of cables or drain pipes; or • (iv) land reclamation work; or • (v) contaminated top soil stripping work; or • (vi) demolition and wrecking of building, structure or road, • but does not include such services provided in relation to agriculture, irrigation, • watershed development and drilling, digging, repairing, renovating or • restoring of water sources or water bodies.

  6. Site formation service. • No abatement. • Exclusion for roads, airports railways, transport terminals, bridges, tunnels & dams.

  7. Construction of residential complex service… • 16.06.2005. • More than 12 units. • Exclusion for personal use.

  8. Construction of residential complex service… • Circular 108/2/2009 Dt. 29.01.2009.

  9. Agreement to sell and execution of sale deed. SELF SERVICE Magus Constructions (P) Ltd. 2008 (11) STR UOI. Sale of UDS and Construction agreement. PERSONAL USE

  10. Construction of residential complex service... • Abatement. Notification 18/2005 & 1/2006

  11. Works Contract service… • 01.06.2007. • Specified Works Contracts. - erection, commissioning & installation. - commercial or industrial construction. - construction of residential complex. - finishing / repair of the above. - turnkey projects / EPC contracts. (Circular No. 116/10/2009 Dt. 15.09.2009)

  12. Works Contract service… • Composition scheme & Non Composition scheme and valuation therefor. • Cenvat Credit. • Value of free supplies Notification 23/2009 Dt. 07.07.09.

  13. Works Contract service… • Ongoing contracts – switchover Circular 98/1/2008 Dt. 01.01.2008 NCC Vs UOI – 2010-TIOL-403-HC.

  14. Works Contract service. • Diebold Vs CCE – 2008 (9) STR 546. • Soma Enterprises Vs CCE – 2009 (15) STR 559.

  15. Amendment in Budget 2010-11… Section 65 (105) (zzq) & (zzzh). Explanation : For the purposes of this sub-clause, construction of a new building / complex, 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 a person authorised by the builder before the 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.

  16. Amendment in Budget 2010-11. • No amendment in WCS! • 75 % abatement – for whom? • How can land value be included?

  17. THANKS www.swamyassociates.com mail@swamyassociates.com93400 5447793400 11034

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