Construction of a complex, building, civil structure or a part thereof, intended for a sale to a buyer, wholly or partly (except where entire consideration is received after issuance of completion certificate by the completion certificate by the competent authority) [hereinafter referred as “developer’s services] was subject to service tax @3.09% (i.e. 12.36% minus 75% abatement).
However, w.e.f. 01.03.2013, developer’s services (vide Notification No.2/2013 dated 01.03.2013) were become subject to service tax @ 3.708% (i.e. 12.36% minus 70% abatement). Said notification had reduced the abatement to 70%.
However, for residential unit having carpet area upto 2000 square feet or where the amount charged is less than rupees one crore, abatement was continue to be 75%, i.e. effective rate of service tax remained 3.09%.
Issue: Language of serial no. 12 of notification 26/2012 dated 20/06/2012 (as amended by notification no. 2/2013) dated 01/03/2013 was not clear and it could be interpreted to mean that abatement of 75% shall be available even if one of the following condition is satisfied.
Serial no. 12 of Notification No.26/2012 as applicable during 01.03.2013 to 07.05.2013:
Serial no. 12 of Notification No.26/2012 as applicable w.e.f. 08.05.2013:
Now, the above notification has been amended to make it clear that benefit of 75% abatement shall be available only if all the following conditions are satisfied:
tax 'N' accounts people
Tarun Kumar Gupta
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