Rate of Service Tax changes under Budget 2017-18 for Construction services of Residential Complex

Service Tax as per Budget for Construction of Residential Complex Service

Rate of Service Tax changes under Budget 2017-18 for Construction services of Residential ComplexIn continuation of demonetization in the country since November 2017 and implementation of GST before September 2017, Indian Budget 2017-18 is being announced on 1st February 2017.

As Service Tax is being transitioned to GST this year, major changes are expected in Indian Budget 2017-18.  The service tax rate changes for Construction of Residential Complex Service under Indian Budget 2017-18 is being updated below soon after announcement of Budget on 1st February, 2017. The government notification extract also is being updated in pdf format once after release from the authorities.

Click here to read government notification on changes in Service Tax tariff rate under Indian Budget 2017-18 

Customs duty tariff rate changes as per Indian Budget 2017-18

Central Excise Duty changes as per Indian Budget 2017-18

Service Tax rate Changes under Indian Budget 2017-18

 

SERVICE TAX

 

S.

No.

Changes

Existing

Proposed

A.

Relief to the armed forces of the Union from service tax

 

1.

Services provided or agreed to be provided by the Army, Naval and Air Force Group Insurance Funds by way of life insurance to members of the Army, Navy and Air Force under the Group Insurance Schemes of the Central Government is being exempted from service tax from 10th September, 2004 (the date when the services of life insurance became taxable).

14%

Nil

B.

Dispute resolution, certainty of taxation  and avoidance of  litigation

 

1.

Notification No. 41/2016-ST dated 22.09.2016, which has exempted from service tax, one time upfront amount (called as premium, salami, cost, price, development charges or by whatever name) payable for grant of long-term lease of industrial plots (30 years or more) by State Government industrial development corporations/undertakings to industrial units, is proposed to be made effective from 1.6.2007 (the date when the services of renting of immovable property became taxable).

14%

Nil

 

2.

Rule 2A of the Service Tax (Determination of Value) Rules, 2006 is proposed to be amended from 01.07.2010 so as to make it clear that value of service portion in execution of works contract involving transfer of goods and land or undivided share of land, as the case may be, shall not include value of property in such land or undivided share of land.

4.2%

4.2%

C.

Promotion of Regional Connectivity  Scheme of Ministry of Civil Aviation

 

1.

Under the Regional Connectivity Scheme (RCS), exemption from service tax is being provided in respect of the amount of viability gap funding (VGF) payable to the airline operator for providing the services of transport of passengers by air, embarking from or terminating in a Regional Connectivity Scheme (RCS) airport, for a period of one year from the date of commencement of operations of the Regional Connectivity Scheme (RCS) airport as notified by Ministry of Civil Aviation.

14%

Nil

D.

Rationalization Measures

 

1.

The exemption in respect of services provided by Indian Institutes of Management (IIMs) by way of two year full time residential Post Graduate Programmes (PGP) in Management for the Post Graduate Diploma in Management (PGDM), to which admissions are made on the basis of the Common Admission Test (CAT), conducted by IIMs, is being extended to include non-residential programmes.

14%

Nil

 

2.

Explanation-I (e) to Rule 6 of CENVAT Credit Rules, 2004 is being amended so as to exclude banks and financial institutions including non-banking financial companies engaged in providing services by way of extending deposits, loans or advances from its ambit.

 

3.

The Negative List entry in respect  of “services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption”, in the Finance Act, 1994, is proposed to be omitted and instead placed in the exemption notification. Consequently, clause (40) of section 65B of the Finance Act, which defines ‘process amounting to manufacture’ is also proposed to be omitted and instead placed in the exemption notification.

Nil

Nil

AMENDMENT IN THE FIRST SCHEDULE TO THE CUSTOMS TARIFF ACT, 1975

S.

No.

Amendment

A.

Amendments not affecting rates of duty

  1.  

The following amendments are being carried out to:

(i)          Delete tariff items 1302 32 10 and 1302 32 20 and entries relating thereto and create new tariff items 1106 10 10 and 1106 10 90, in relation to Guar meal and its products so as to harmonize the Customs Tariff with HS Nomenclature.

(ii)        Create new tariff item 1511 90 30 for Refined bleached deodorized palm stearin, so as to harmonize Customs Tariff in accordance with WCO classification decision.

(iii)      Substitute tariff items 3823 11 11 to 3823 11 90 and entries relating thereto with tariff item 3823 11 00.

(iv)      Substitute tariff items 3904 10 10 to 3904 22 90 with tariff items 3904 10 10 to 3904 22 00 in relation to the PVC Resin.

  1.  

Chapter Note (4) of Chapter 98 is being amended so as to remove the non-applicability of headings 9803 and 9804 to goods imported through courier service. Also, heading 9804 is being amended so as to extend the classification of personal imports by courier, sea, or land under this heading. 


Construction of Residential Complex Service fall under SAC 00440334

The Law about Service Tax for Construction of Residential Complex Service explains:

(i) “Construction of Complex” means — (a) construction of a new residential complex or a part thereof; or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex; (Section 65(30a) of the Finance Act, 1994)

(ii)“Residential Complex” means any complex comprising of—

(i)                  a building or buildings, having more than twelve residential units;

(ii)                 a common area; and

(iii)                any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as residence by such person.

Explanation. — For the removal of doubts, it is hereby declared that for the purposes of this clause, —

(a) ?personal use? includes permitting the complex for use as residence by another person on rent or without consideration;

(b) ?residential unit? means a single house or a single apartment intended for use as a place of residence; (Section 65(91a) of the Finance Act, 1994)

“Taxable Service” means any service provided or to be provided to any person, by any other person, in relation to construction of complex;

[Explanation.- For the purposes of this sub–clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorized 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 authorized 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;]

 

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What is the service tax rate for Construction of Residential Complex Service as per Budget?                                                       ST tariff rate changes for Construction of Residential Complex Service under SAC   00440334

Budget 2017-18, Service Tax to be paid for Construction of Residential Complex Service

Construction of Residential Complex Service, Service Tax tariff rate changes in Budget, SAC  00440334

Section 170 Rounding off of tax, CGST Act, 2017

Sec 168 of CGST Act, 2017 Power to issue instructions or directions          

Section 163 of CGST Act, 2017 Levy of fee            

Publication of information in respect of persons in certain cases, Section 159 of CGST Act, 2017 

Section 156 Persons deemed to be public servants, CGST Act, 2017         

Power to collect statistics, Section 151 of CGST Act, 2017              

Goods and services tax compliance rating, Sec 149 of CGST Act, 2017      

Section 146 of CGST Act, 2017 Common Portal   

Section 145 of CGST Act, 2017 Admissibility of micro films, facsimile copies of documents              

Job work procedure, Section 143 of CGST Act, 2017         

Section 139 of CGST Act, 2017 Migration of existing taxpayers    

Section 135 Presumption of culpable mental state, CGST Act, 2017          

Liability of officers and certain other persons, Section 133 of CGST Act, 2017       

Sec 132 of CGST Act, 2017 Punishment for certain offences          


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