Service tax on developing land and selling residential flat

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PRAVIN VADNERE (Querist)

24 September 2016 Our client = Partnership firm land owners = individual contract = as per contract our client developing plot and constructed twins bungalow out of which one bungalow given to land owner free of cost + some considerations for their land which is much below than government values one bungalow can sell out our client as market value to anybody and all consideration will received our client land developing agreement was done and construction was started our client is from Maharashtra construction is in progress now and completion certificate not get as on now please give us information regarding MVAT and service tax applicability of 1) bungalow given without consideration land owner 2) if one bungalow sell out before completion and after completion

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

25 September 2016 1 Works contract service tax on 40% value excluding land and works contract VAT applicable.
2 Service tax on 30% value including land applicable before completion. no service tax after completion.

PRAVIN VADNERE

PRAVIN VADNERE (Querist)

25 September 2016 Thanks you very much sir please guide me following this is first project of my client hence he is not enough knowledge of construction so that he gives contract for developing plot my client intention is sale out one bungalow and gives contractors for developing plot in this case he not calculated statutory liabilities so please explain who is lible to pay tax

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

25 September 2016 Pass on the tax to buyers.

PRAVIN VADNERE

PRAVIN VADNERE (Querist)

25 September 2016 thank you very much sir

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