75th Founding Day Lecture Meeting on “India@2030” Know More

June 2013

Abatement rate in Construction Activity Services amended :

By Tarun Ghia, Brijesh Cholera, Pratik Mehta, Chartered Accountants
Reading Time 1 mins
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Notification No. 9/2013 ST dated 08-05-2013

By this Notification the existing Notification No. 26/2012 ST dated 20-06-2012 has been amended to remove the ambiguity prevailing on the rate of abatement of service tax on construction of residential units, to provide the rate of abatement in the case of construction of a complex, building, civil structure or a part thereof in the following manner:

(a) Service tax has to be paid on 25% value of a residential unit if the following two conditions are fulfilled cumulatively : (i) the carpet area of the unit is less than 2,000 sq. ft.; and (ii) the amount charged for the unit is less than Rs. 1 crore;

(b) In other cases, service tax will be paid on 30% of the value of a complex, building, or civil structure.

It is also reconfirmed that the above abatement would be available only if the (1) CENVAT credit on inputs used for providing the service has not been availed & (2) the value of land is included in the amount charged to the Service recipient.

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