Students
are advised to read Point 2 given hereunder in place of point 2 given in pages
146-149 under Section B – Service Tax of Part – I: Statutory Updates of Paper
8: Indirect Tax Laws:-
2. Lower
abatement for commercial construction and high-end construction of
residential units.
Earlier,
in case of construction services (both residential and commercial units),
abatement of 75% of the amount charged by the service provider for providing
the said taxable service was allowed subject to the following conditions:
(i) The value of land was included in the
amount charged from the service receiver and
(ii) CENVAT credit had not been taken on
inputs used for providing such service.
Amendment made
by Notification No.02/2013-ST dated 01.03.2013
Service
Tax abatement has been decreased from 75% to 70% in case of commercial
construction and high-end residential construction. However, abatement of 75%
would be available in case of residential units which fulfil any of the
following two conditions:
(i) The carpet area of the unit is upto
2000 square feet; or
(ii) The amount charged for the unit is
less than Rs. 1 Crore;
Thus,
residential units, where the carpet area is more than 2000 sq. ft. and where the amount charged is Rs. 1
Crore or more would be considered as high-end construction and hence, would
be eligible for lower abatement of 70%.
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