Applicable, rate and abatement

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This query is : Resolved

Bhavesh (Querist)

15 April 2016 My Client Purchases Land And Develop Land like Land leveling, road etc from third parties than sale plot so tell me sir service tax applicable to my client and land developer service tax rate , abatement, Section

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

15 April 2016 Development of land, if it includes soil stabilization, land reclamation, contaminated top soil stripping, horizontal drilling for laying cables and pipelines, demolition and destruction of structures would be deemed to be Site Formation and Clearance service which was taxable under section 65(97a) of the Finance Act 1994 (as amended). Post 1st July 2012 - development work done by developers on land and the consideration is towards the construction of a complex / building intended for sale to a buyer before the issuance of Completion Certificate by the Competent Authority is a taxable service covered under section 66E (b).

However since your client does not develop the land for purposes of construction of commercial or residential units and just sells the developed land per se - the activity is not subject to service tax.

The infrastructure activities like laying and repairing roads is covered under Negative List (Notification No:25/2012 - Entry 13) and hence is not taxable.

Per your description the services of your client are not taxable, but if any of the activies enumerated in the opinion is done, then the same would be subject to service tax.

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