1. I am a land owner & civil engineer constructing an apartment complex on my self owned land. 2. There are 12 residential units in the apartment. 3. The agreements for sale is made with 2 prospective purchasers in the month of nov 2011 and feb 2012. 4. There are 2 agreements one for selling undivided share of land and the other construction agreement. 5. There is a chartered engineer certificate showing the level of construction as on 01/07/2012. 6. The agreement is such that all the initial payments as shown in the agreement go for only undivided share of land and later after the exhaustion of the sum to be paid for undivided share of land, the payments for construction start. 7. A post dated cheque is received from the purchaser of the flat, for the construction agreement, such that all the other payments of undivided share of land is exhausted and the value of construction starts with this PDC.
Clarifications for.
1. Is service tax applicable for my complex. 2. If so, since the agreements are made before 01/07/2012, will those 2 prospective purchasers, exempted from service tax, since they had entered into agreement before the law came into force. 3. If S.Tax is applicable which is the best method for my kind of work. 4. How turnover is to be taken into consideration for knowing whether I will be exempted from 10lacs turnover limit for last year. 5. Will the service tax be applicable on a prorata basis for the services made upto 01/7/12.
27 October 2012
Service tax is applicable on sale of complex and not on land if separate agreement for land and construction has been entered. If you sale the apartment after completion then it is not but as you have already entered into an agreement for advance sale it is applicble
If I raise a material bill, then the service is for my self, and if it is for the prospective client, then it is for his personal use. The conveyance happens only after I give the possession of the property and not before that. Where is the act of service provider and service receipent. As long it is not conveyed the bill is in my name and for self use there is no service tax, and since I am entering into a separate land cum construction agreement, then if it is for the prospective purchaser, then only the construction agreement cost is subjected to service tax on works contract basis only, and not like residential complex. For a residential complex basis of service tax the receipent himself is constructing his unit of apartment for his self use and therefore it is not subjected to service tax isn't it.
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