« Top Headlines » Open DEMAT Account in 24 hrs  Delhi HC Rules GST Registration Cannot Be Cancelled Retrospectively Without a Clear Show Cause Notice (SCN)  Belated income tax return AY 2026-27: How to file, late filing charges and what you may lose  Major Financial Changes from August 1, 2026: ITR Deadline, RBI MPC Meeting, Tatkal Ticket Rules & More  Government proposes to ease tax relief conditions for offshore funds  TallyPrime Connected Banking: Automating Banking and Accounting  ITR Filing Deadline 2026: Is July 31 the Last Date to File Your Income Tax Return? Latest Official Update  ITR filing deadline nears: How to file income tax return online on e-filing portal - quick 15-step guide  Will the ITR Filing Deadline Be Extended Beyond July 31 for FY 2025-26? Here's the Latest Update for Taxpayers  Income Tax Refund Delayed for AY 2026-27? 5 Common Reasons Your Refund May Be Stuck and How to Fix It  ITR Filing 2026: FM Nirmala Sitharaman Asks Tax Officials to Let Honest Taxpayers Correct Genuine Mistakes  Will Your FCNR Deposit Stay Tax-Free After Returning to India? Tax Rules Explained for NRIs «  When a mega merger runs into rough weather... Avg Chandigarh resident earns Rs 1.09 lakh/ month... » Tax component may be refunded August, 08th 2006 Flat buyers may be spared the 12.2% service tax, with the government making it clear that a builder who does construction work on his own do not have to pay service tax. Some builders, who have added the service tax component to the cost of the flat, have parked these proceeds in an escrow account. Its possible the money may be refunded. The finance ministry has, however, held that in a case where the builder, promoter or the developer builds a residential complex with more than 12 units by engaging a contractor, the contractor will be liable to pay service tax on the gross amount charged for construction services. Builders did not contest the levy of service tax on contractors. They have only opposed levy of service tax on the sale of a flat, said an industry analyst. Residential complexes were brought under the service tax net from June 05. The government had said service tax will be charged only on the value of the contract for constructing the block. Land value will be excluded while computing service tax. Further, the abatement of 67% on the value of the contract will be allowed if the construction contract is turnkey the contractor supplies the material and labour. Builders contended they are not liable to pay the levy because they have the rights to develop the property. They cited a CBEC notification which said estate builders who construct buildings for their own use or rent it out or sell it out subsequently were not taxable service providers. However, the directorate of service tax went by a SC ruling which said that a works contract included in any agreement for carrying out either for cash or for deferred payment or for any valuable consideration, the building and construction of any movable or immovable property would attract a turnover tax.