Service tax in case of builders and developers

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ashish jain (Querist)
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25 December 2014 WHAT WILL BE THE SERVICE TAX IMPLICATIONS IN THE FOLLOWING CASES :

1. THE DEVELOPERS ENTERS INTO AN AGREEMENT WITH THE LAND OWNER FOR PURCHASE OF AGRICULTURAL LAND BY THE DEVELOPER AND AFTER PURCHASE, THE DEVELOPER WILL DEVELOP THE LAND , I.E. HE WILL CUT THE PLOTS, DEVELOP THE ROADS & OTHER FACILITIES, ETC. ON TO THE LAND AND WILL THEN SALE THE PLOTS AT THE GUILDINE VALUE PER SQ FT.

2. WHAT IN THE ABOVE CASE THE DEVELOPER DOESNT PURCHASES ANY LAND BUT WILL ENTER INTO AN AGREEMENT WITH THE LAND OWNER TO DEVELOP THE LAND BY TAKING POSSESSION OF THE LAND AND THEN THE OWNER WILL SALE THE PLOT.
(IN THIS CASE WHAT WILL BE THE SERVICE TAX LIABILITY ON BOTH THE OWNER AND THE DEVELOPER.)

3. THE DEVELOPER HAS OFFER FROM A LAND OWNER, WHOSE PLOTS ARE ALREADY DEVELOPED AND READY FR SALE.
IN SUCH CASE THE DEVELOPER IS WILLING TO PURCHASE THE PLOTS FROM THE LAND OWNER (WITHOUT REGISTRY, SAY AT A GUIDELINE RATE OF RS 100 PER SQ FT) AND THEN WILL SALE THE PLOTS AT A PRE DISCUSSED RATE OF 125 PER SQ FT THERE BY MEETING ALL HIS EXPENSES AND PROFITS OUT OF MARGIN OF RS 25 PER SQ FT.

ALSO KINDLY SUGGEST WHETHER A JOINT SALE AGREEMENT IS POSSIBLE FOR THE 3RD CASE.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 December 2014 Please see the link.

https://www.caclubindia.com/articles/service-tax-implications-of-plotted-development--19807.asp#.VJvtnsAA

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ashish jain

ashish jain (Querist)
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26 December 2014 BUT WHAT WILL BE THE SERVICE TAX IN CASE THE DEVELOPER HIMSELF IS DEVELOPING THE AGRICULTURAL LAND INTO PLOTS, AND IS ALSO DEVELOPING ROADS AND GARDINS IN THE TOWNSHIP.

ALSO KINDLY TELL ME ABOUT THE REVERSE CHARGE MECHANISM IF THE COMPANY IS A PRIVATE LIMITED COMPANY.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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24 July 2025 https://docs.google.com/document/d/1U8pT9pakR7GKRAgDIft-Atu-57BzM9sKKYEm2XF54e8/edit?usp=sharing

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