Service tax real estate
This query is : Resolved
20 December 2013
my client is engaged in purchasing land, thereafter to developed it i.e to ploting & then sell individual plots. My query is - is it taxable under service tax? if yes under which service.- Sanjay
20 December 2013
Since no building or civil structure has come up due to these activities ST doesn't apply. What you are transferring is only immovable property. So no ST.
20 December 2013
Sir ,From the details provided by you it seems your client is a builder who purchases land and then developes the same and sells it.As per my view its taxable.Sale of developed plots is taxable under Construction Services declared under Section 66E(2)
In support of my view i would like to make a note of the following para in EDUCATION GUIDE TO SERVICE TAX
-Construction service provided by the builder/developer is taxable in case any part of the
payment/development rights of the land was received by the builder/ developer before the
issuance of completion certificate.
-The charge is on rendering
a taxable service and the fact that the service is rendered in relation to land does not alter
the nature or character of the levy.
-As per the legislature has expanded the notion of taxable service by incorporating within its ambit of clause (zzq) and (zzzh) services rendered by a builder to the buyer in course of intended sale whether before,during or after construction.
Therfore any part of payment received by builder before the issuance of completion certificate is taxable to service tax.
Pl refer the caseof Narne Construction Private Limited Vs UOI
In support of my view i would like to make a note of the following para in EDUCATION GUIDE TO SERVICE TAX
-Construction service provided by the builder/developer is taxable in case any part of the
payment/development rights of the land was received by the builder/ developer before the
issuance of completion certificate.
-The charge is on rendering
a taxable service and the fact that the service is rendered in relation to land does not alter
the nature or character of the levy.
-As per the legislature has expanded the notion of taxable service by incorporating within its ambit of clause (zzq) and (zzzh) services rendered by a builder to the buyer in course of intended sale whether before,during or after construction.
Therfore any part of payment received by builder before the issuance of completion certificate is taxable to service tax.
Pl refer the caseof Narne Construction Private Limited Vs UOI
20 December 2013
Thank you mr Ashok & Mr Annu Agarwal for your valuable reply. - Sanjay
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