Liability

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

29 February 2016 I want to know if developers wants to develop any commercial complex without taking any advance from customers who wants to buy. Developers only develop by them selves and by taking loan form banks and others.. So whether they have to registered under service tax act or only vat will apply ??

thanks in advance

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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29 February 2016 Construction of Commercial Complex Service is leviable on the "receipt of any sum by the builder from the prospective buyer in respect of the construction of a new building which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or the person authorised by the builder before grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer”

Accordingly liability to service tax arises only if any sum is received before the issuance of completion certificate by the competent authority. From you query it appears that no such sums were received. Hence there will be no liability service tax, nor any requirement to register oneself with the Central Excise Authorities.

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Querist : Anonymous

Querist : Anonymous (Querist)

29 February 2016 Thank you Sir for your kind help

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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29 February 2016 You are most welcome.

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