16 August 2013
If the person who has entered into a contract with the builder for a flat for which payments are to be made in 12 installments depending on the stage of construction and the person transfers his interest in the flat to a buyer after paying 7 installments, would such transfer be an activity chargeable to service tax?
In the above question the payments are made depending on the stage of constructin then it is clearly evident that the payment is made before the issue of the completion certificate so therefore the payment attracts service tax.
but the servicetaxonline.com in its article says it doesnt attract service tax
According to me, the ST is to be paid till the time of getting the Completion Certificate. Hence, in your case, even though the interest in the property is transferred, the service still continues till the time it is fully constructed. Hence, ST should be payable on all the 12 installments
16 August 2013
by the persons who transfer his interest, i presume, you mean the buyer of flat. This is a case of transfer of right and is not liable for service tax.
disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case