08 June 2012
I HAVE A CLIENT WHO IS A BUILDER, WHO CONSTRUCT BUILDING by DEMOLISHING THE SLUMS & ALLOT THE FLAT IN THE BUILDING to the original OWNER OF flat in the new constructed building & SALE THE EXTRA FLAT WHICH remains AFTER ALLOTTING TO ALL THE OWNER, SO AS PER SERVICE TAX THE BUILDER IS WHAT? a)constructor or builder or developer? and is he is liable to pay service tax? if yes then on what amount?
09 June 2012
Here in the instant case, the builder and owner of the plot become joint developers or partners for the purpose of construction of flats. In case if there are more than 12 no of flats in the newly constructed building, the builder has to pay Service TAx on the consideration received towards sale of the flats of his share. Recent CESTAT decision is that Service TAx is to be paid even on the share of flats given to the land owner.
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