10 January 2013
sir .. if mr A gives rs 10lakhs as token money to builder to purchase the flat for rs 1 crore and mrA paid service tax on rs 10lakh as flat is under construction
in the mean while mrA agrees to sale this flat to MR.C after obtaining completion certificate for rs 1.2 crore
AND SALE DEED IS EXECUTED DIRECTLY IN FAVOUR OF MR.C
DOES THAT PROFIT OF RS 20laks liable to service tax in the hands of MR.A ??
if yes,CAN HE CLAIM INPUT CREDIT OF SERVICE TAX PAID ON RS 10 LAKH???
SIR PLEASE REPLY
Guest
Guest
(Expert)
10 January 2013
The transaction between Mr A & Mr. C is that of sale transaction on which service tax is not applicable.
10 January 2013
sir how can it be a sale transaction ?? mrA just paid advance money (token money) and sale deed is executed directly between builder and mr.c
10 January 2013
and sir what if mr.A business is to book falt on token money( and sell them to prospective buyer..
does profit on such transction amounts to brokerage or commission ? if not then what is the treatment of that profit
Guest
Guest
(Expert)
10 January 2013
In case Mr. A is in business of real estate i.e. business of buying & selling properties, the amount earned by Mr. A shall be profit from business not commission. Because commission or brokerage is paid by builders to the brokers or real estate agents. Moreever Mr. A has invested his money i.e. paid token amount it will be a transaction of purchase & sale of property on which service tax is not leviable since it does not amount to service.
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