Service tax on sale of flats in a complex

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 September 2014 A builder has developed a multi storey building consisting of 12 residential flats. He has sold a few in pre-construction stage and others post completion.Can he or should he charge service tax on sale price of flats sold post completion? Is service tax leviable on post completion flats, in case some of the flats in the same complex were sold in pre construction period?

bharat

bharat (Expert)
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28 September 2014 service tax is not applicable on flat sold after taking completion certificates. also til july 12 their is no service tax on the building consisting only 12 residential units..

Querist : Anonymous

Querist : Anonymous (Querist)

29 September 2014 Thanks for clarification. However, suppose builder has sold 2 flats under construction, on which he has charged service tax, and other 10 flats after completion, on which no service tax is levied. He has paid service tax on input services for 12 flats, constructed in same complex and taken credit for same. Is he now required to reverse credit of input service tax for 10 flats he has sold post completion? Or will the balance remaining in his cenvat credit account be carried to his next construction project?

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bharat

bharat (Expert)
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23 February 2015 Yes , credit needs to be reversed on completion of the project..