Last week, the Central Board of Excise and Customs notified that a service tax of 10 per cent would be levied on the gross value of a housing property under construction from July 1.
Only properties built under the Jawaharlal Nehru National Urban Renewal Mission and the Rajiv Awaas Yojana would not be taxed.
Earlier, the abatement for housing properties was 67 per cent (meaning, the tax used to be imposed on the remaining 33 per cent of the cost).
However, the service tax was imposed on the contractor, not the builder, so the buyer didn't come into the picture.
Now, it is the builder who will have to pay, and the abatement has been made 75 per cent for single-agreement purchases (land and cost of construction combined) and 67 per cent on the cost of construction for dual agreement ones (the two separated).
Text: Business Standard
Images Courtesy: Reuters/AP
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