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VISAKHA VISION Vol- 4 Issu- 4 Jan-Feb’ 2014

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VISAKHA VISION Vol- 4 Issu- 4 Jan-Feb’ 2014 FOR PRIVATE CIRCULATION ONLY VISAKHA VISION Vol- 4 Issu- 4 Jan-Feb’ 2014 TOP ARCHITECTURE FAILURES DIRECT AND INDIRECT TAXES editorial office bearers Chairman B. RAJA SRINIVAS Cell.No.98497 09999 E-Mail : [email protected] President K. RAMA KRISHNA RAO Cell.No.98480 37477 E-Mail : [email protected] Vice-Presidents P. VENKATA RAMANA Cell.No.98481 20452 editor’s message E-Mail: [email protected] G. V. V. S. NARAYANA Cell.No.98481 30272 E- Mail : [email protected] D. SRINIVASA RAO Cell No.98491 27011 E-Mail : [email protected] Dear Readers, Hon. Secretary Happy New Year. I wish 2014 was a good start for you all and hope the year P. KOTESWARA RAO ahead would be filled with love and happiness. At the dawn of another year, Cell.No.99086 00005 let us realize that this earth is not what we inherit from our ancestors, it is E-Mail : [email protected], what we borrow from our offspring. It is our duty and responsibility to pass Treasurer on this precious belonging in good shape so that future generations lead B. SRINIVASA RAO their life comfortably. Let us be wise and save non-renewable resources, Cell.No.98481 22825 trees and natural habitats. I do not intend to say that we have to give up all E-Mail: [email protected] that we do; however, we can incorporate little changes that can make the earth a better place. Joint Secretaries Have a nice day, K. S. R. K. RAJU (SAI) Cell.No.98481 85679 E-Mail : [email protected] P. RAMA KRISHNA Cell:98484 14051 K. S. Chandran E-Mail : [email protected] Bullettin editor Committee Members A. SHIVANAND Cell: 99633 22000 All the Members are requested to get their address updated with the association in order to ensure E-Mail: [email protected] timely delivery of magazine also your email ID for speedy communication. If you are not receiving a copy of magazine of CREDAI, VISAKHAPATNAM chapter. please contact @ 9848854448 P. R. K. RAJU Cell: 98490 01119 E-Mail: [email protected] Editorial Board K.S. Chandran K. V. R. RAJU (Ramesh) Cell: 95506 33399 Printed at Sathyam Offset Imprints, Brindavan, #49-28-5, Madhuranagar, E-Mail : [email protected] Visakhapatnam, Ph: +91 891 2735878 N. SIVAJI Layout & Design ideafirst, #9-18-1, 1st Floor, Vinayagar Enclave, CBM Compound, Cell : 98481 97643 Siripuram, Visakhapatnam, Ph: +91 891 2508150 E-Mail : [email protected] CH. GOVINDA RAJU Cell: 98485-21789 CREDAI VISAKHAPATNAM E-Mail: [email protected] (Regd. No : 231of 2010) Immediate Past Chairman M. V. V. SATYANARAYANA Published by #1, First Floor, KSR Complex, Seethammadhara, Visakhapatnam-530 013, Cell.No.96666 66600 Ph: 0891-2739612, Mob: 9848854448, 99120 54448 E-Mail : [email protected] Email : [email protected] Website: www.credaivisakhapatnam.org 06 Credai visakhapatnam tax Y Surya Chandra Rao Charterd Account Cell. 9848186662 BUILDERS/DEVELOPERS OF RESIDENTIAL/ COMMERCIAL COMPLEXES – COMPLIANCE OF DIRECT AND INDIRECT TAXES– A SYNOPIS India with a population of 1.2 Billion has a significant need of affordable housing keeping in view of the growth of the economy at a brisk pace. The Construction industry plays a vital role and an important indicator and a major contributor to the national GDP as well as revenue garner for the exchequer in the form of various taxes. At present the infrastructure is the need of the hour. Residential developers play a crucial role in creating the jobs (Direct and indirect), thus helping the economy. The Residential developers have to comply with so many statues in their day to day operations. We herewith list a few of them in brief which are encountered by them regularly in their business. TAX 08 Credai visakhapatnam tax 1.Value Added Tax (Sales Tax): Under i.e to say practically all the apartment payable on actual value and not the Andhra Pradesh Value added tax complexes are now covered by service under composition scheme and the Any dealer engaged in construction tax. As per the provisions of the law value cannot be determined in such and selling of residential apartments, the residential complex developers a case, the person liable to pay tax houses, buildings or commercial are covered under the category of on the service portion involved in the complexes may opt to pay tax by “Construction of Residential Complex execution of the works contract shall way of composition at the rate of Services” and “Works Contract”. determine the service tax payable in 5% of twenty five percent (25%) The developers who have taken up the following manner: (i.e 1.25% on the total value) of the the “pure construction” activity i.e consideration received or receivable contractors engaged in construction A) In case of original works contract- or the market value fixed for the in general parlance and when VAT is 40% of the total amount charged for purpose of stamp duty whichever is paid on such services are subjected works contract higher as per Section 4(7)(d) of APVAT to service tax in the category of the read with Rule 17(4). This tax being an Works Contract. The value of the B) In case of works contract entered indirect levy the said amount is to be contract Where the VAT has been into for maintenance or repair or collected from the customer and has paid / payable on actual value and reconditioning or restoration or to be remitted to the government. If not under composition scheme is and servicing of any goods (Thus, activities the builder has failed to collect and Where the VAT has been paid on the relating to immovable property are remit the said amount he will also be actual value of goods transferred in not covered) -70% of the total amount liable for tax , interest and other penal execution of works contract, in such charged for the works contract consequences. a case, value of service portion in the execution of a works contract shall C) Other works contract not covered 2.Service tax: Service tax after be equivalent to the gross amount -by (A), or (B), above including numerous changes, circulars and charged for the works contract maintenance, repair, completion and notifications has brought down the less the value of property in goods finishing services such as glazing, clarity at last that the construction transferred in the execution of the plastering, floor and wall tiling, activity is liable for this tax also. At said works contract. installation of electrical fittings of an present a complex having more than immovable property -60% of the total one unit is also liable for service tax, Where the VAT has been paid / amount charged for the works. SeRvICe TAx on ReveRSe ChARGe IS AlSo Be To Be PAID In CeRTAIn CASeS. In The CASe of ConSTRuCTIon of ReSIDenTIAl ComPlex SeRvICeS Description of taxable service Tax to be levied on percentage of Condition taxable value Construction of a complex, building, 25% (Effective rate will be 3.09% on (i) CENVAT credit on inputs used for civil structure or a part thereof, total value) providing the taxable service has not intended for a sale to a buyer, been taken under the provisions of the wholly or partly except where entire CENVAT Credit Rules, 2004; consideration is received after issuance of completion certificate by (ii) The value of land is included in the competent authority,- the amount charged from the service (a) for a residential unit satisfying receiver both the following conditions, namely:– (i) the carpet area of the unit is 30%(Effective rate will be 3.71% on less than 2000 square feet; and total value) (ii) the amount charged for the unit is less than rupees one crore; (iii) for other than the (i) above Credai visakhapatnam 09 tax This tax being an indirect levy the share Accordingly, the value of these used for arriving at the value for the said amount is to be collected from flats would be equal to the value of purpose of tax. Service tax is liable the customer and has to be remitted similar flats charged by the developer to be paid by the developer on the to the government. If the builder from the second category of service ‘construction service’ involved in the has failed to collect and remit the receivers i.e to say on the value of flats to be given to the land owner, said amount he will also be liable the similar flat charged from outside at the time when the possession or for tax , interest and other penal buyer. As the rates change over a right in the property of the said flats consequences. period of time during the course of are transferred to the land owner by completion of the project , the value entering into a conveyance deed or In the case of development of similar flats as are sold nearer to similar instrument(i.e to say at the agreements :, The service tax is the date on which land is being made time of handing over).( Circular No. also to be paid on the land owner available for construction should be 151 /2 /2012-ST). WhAT IS Due DATe of SeRvICe TAx RequIReD To Be PAID? 1. PAymenTS ThRouGh BAnk : Category Frequency Due Dates In case of Individuals, proprietary Quarterly as mentioned below - th Firms & Partnership Firms (i) For Q.E. 30th June - by 5 July th (ii) For Q.E. 30th Sept. - by 5 Oct th (iii) For Q.E. 31St Dec. - by 5 Jan. st (iv) For Q.E. 31st March - by 31 March Others (e.g.
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