Service tax on developing land & selling plots

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CA NILESH AGRAWAL (Querist)
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16 January 2013 5. Whether service tax is applicable on developing a land and selling plots.
- Can we call this a service and colonizer a service provider.
- A contractor who is developing colony under a contract with developer is liable to pay service tax.

Kaushik Vinod

Kaushik Vinod (Expert)
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17 January 2013 Dear Nilesh,

Simple sale of land is not taxable but construction services are taxable @ 25% of 12.36% if it includes value of land in other case 40% of total value.

Yes Contractor is liable to pay tax on 40% of the value as per valuation rules,2006 Rule 2A.

Thanks