The commission of
service tax has issued clarification which is applicable for redevelopment
& SRA (Slum Rehabilitation Authority) projects post July 1,2012.
Construction services
provided to existing flat (apartment) owners or / slum owners under a scheme of
redevelopment or SRA project without any consideration shall also be eligible
for service tax in the hands of the person who undertakes such construction activity.
In respect of floor
rising charges, it will also be eligible for an abatement of 75 per cent.
However, this clarification is limited to floor rising charges only & not
for other components of the erstwhile definition of "preferential location
service" which covers many other services.
According to Ernst
& Young, it will have an impact on the cost of redevelopment projects &
also on the service tax liability in the hands of developers.
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