Point of taxation

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

06 July 2012 helooooooooo there

when a person transfer his land for development of Residential flats and developer built the residential flats and t/f some of them to land owners and some are sold then when will the point of taxation for flats t/f to land owners. is it when land is trasfered or when a fully built flat transfered.

Pls support ur reply with evidence.

thanks in advance

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

06 July 2012 Here two important transactions are identifiable: (a) sale of land by the landowner which is not a taxable service; and (b) construction service provided by the builder/developer. The builder/developer receives consideration for the construction service provided by him, from two categories of service receivers: (a) from landowner: in the form of land/development rights; and (b) from other buyers: normally in cash.
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 and the service tax would be required to be paid by builder/
developers even for the flats given to the land owner.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)

06 July 2012 Value, in the case of flats given to service receiver will be the value of the land when the same is transferred and the point of taxation will also be determined accordingly.

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