sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« Service Tax »
 How to save tax on capital gains arising from selling a house
 Tax savers start hunting for best ELSS ahead of tax-saving season
 NotificationNo.1/2018-ServiceTax
 All you need to know Taxation of dividend income
 How different forms of gold are taxed
 Should you use home sale value to get tax break
 Auction of Government of India Dated Securities November 12, 2018
 Auction for Sale (Re-issue) of Government Stock (GS) November 12, 2018
 How can I save tax on gains made on selling a shop a
 Here's is a quick guide to how you can save tax on gifts
 Don't buy life insurance just for saving tax, ask these 4 questions before investing

Service tax earns Rs 150 cr from construction
September, 18th 2010

A new provision in Budget 2010 which captured construction of residential and commercial properties in the service tax net by separating the service element of the activity has fetched Rs 150 crore to the exchequer up to August this fiscal, double the amount collected in the corresponding previous period. The rise in collections comes despite strong resistance to the measure by the builders lobby and a spate of litigation.

According to the Budget provision that took effect in July, construction of such properties for sale is a service that is taxable. A dividing line was drawn between the service and sale element of the activity by prescribing that till the builder secures the completion certificate from the local authority, he has rendered a service to the buyer and the transaction of the completed property is a sale. While the former is subject to service tax, state-level value-added tax is payable on the sale.

The good collection figures mean that a number of builders have started paying the tax. This is even as many of them have also challenged the provision in various courts, an official said.

Industry bodies through writ petitions had challenged the constitutional validity of the Finance Act 2010 provision. Developers say it is unconstitutional and irrational to charge service tax on construction of property for sale. The tax could inflate sale price by 2.6%. Since land is a state subject and the cost of land is part of the value of the property, the Centre has allowed an abatement of 75%.

The service tax is leviable on housing complexes with more than 12 dwelling units. Sources said that tax evasion was particularly high in north Indian states where, unlike in the southern states, land is not separately registered.

Service tax is a growing source of revenue though collections suffered during the last slowdown when there was a 2% tax cut given by the government as part of a stimulus package to industry. During April-August this fiscal, service tax collections were up 20% to Rs 22,634 crore.

Thanks to amendments in Budget 2010, the government had projected an additional revenue of Rs 1,000 crore and another Rs 200 crore is expected from renting immovable property.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Our Experience

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions