Service tax on land develooers
This query is : Resolved
L.K. AGARWAL
(Querist)
08 October 2012
FCAT OF THE AGREEMENT BETWEEN LAND OWNER MR. A AND LAND DEVELOPER MR. B ARE AS UNDER:-
- Mr. A handover land to Mr. B for construction of 6 flats.
- B, constructed 6 flats on the land and all construction exp. wear by B.
- Sale consideration of all 6 flats divided by A & B in 50:50 ratio.
- All flats are sold after taking completion certificate from autorised agency.
- Whether service tax is apply on this case or on which party A or B or on both.
- Mr. A handover land to Mr. B for construction of 6 flats.
- B, constructed 6 flats on the land and all construction exp. wear by B.
- Sale consideration of all 6 flats divided by A & B in 50:50 ratio.
- All flats are sold after taking completion certificate from autorised agency.
- Whether service tax is apply on this case or on which party A or B or on both.
CA Rahul Trada
(Expert)
08 October 2012
It is one type of construction contract services so service tax is applicable.
In this case it is one type of partnership because land is of Mr.A and The developer incurred cost of development. The sale consideration is divided in the agreed ratio.
The liability of service tax is on Provider of service. In this case Partnership firm provides services to person who purchase flat.
So service tax liability is on partnership.( Subject to Reverse charge mechanisum as Notification 46 or 47 of 2012)
In this case it is one type of partnership because land is of Mr.A and The developer incurred cost of development. The sale consideration is divided in the agreed ratio.
The liability of service tax is on Provider of service. In this case Partnership firm provides services to person who purchase flat.
So service tax liability is on partnership.( Subject to Reverse charge mechanisum as Notification 46 or 47 of 2012)
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