Service tax on plot
This query is : Resolved
21 December 2013
I am purchasing a plot and selling it after constructing some low wall so is it covered under service tax.
21 December 2013
1. sir here what is your intention, trading or providing service, because u purchase a plot and some improvement made on plot and sale that,
so here no question of service tax
so here no question of service tax
22 December 2013
No need to pay service tax.
23 December 2013
but if i am constructing service that will be liable to service tax?
23 December 2013
YES IF YOUR PROVIDE CONSTRUCTION SERVICE AND YOU CROSS THERESHOLD LIMIT RS. 9/10 LAKHS
THEN YOU HAVE TO REGISTERED AND PAY TAX
THEN YOU HAVE TO REGISTERED AND PAY TAX
23 December 2013
But whether does it attract Works Contract???
24 July 2025
Here’s the clear position on **service tax related to sale of plot with some construction (like a low wall):**
---
### 1. **Sale of Plot (Land)**
* Sale of **pure land or plot** is **not subject to service tax** or VAT.
* Land is considered an immovable property, and the sale of land is treated as a **sale of goods (immovable property)** and not a service.
* So, just buying and selling a plot—no service tax.
---
### 2. **Construction of Low Wall / Improvement on Plot**
* If you construct something on the plot (like a low wall), it may amount to **“Works Contract Service”** if the value crosses the threshold.
* Service tax is applicable on **works contract service**, which covers construction, installation, repair, or renovation activities.
* The tax is payable on the service portion of the contract value (deducting value of materials).
---
### 3. **Whether it attracts Works Contract?**
* Yes, **construction of low wall** on the plot will be covered under **Works Contract Service**.
* If you sell the plot after constructing the wall, the construction part is treated as a taxable service (if threshold limits are exceeded).
* The sale of plot itself is not taxed, but the construction service on the plot is taxable.
---
### 4. **Threshold limit**
* You must register and pay service tax if your aggregate taxable service turnover exceeds ₹9/10 lakhs in a financial year.
---
### **Summary:**
| Activity | Service Tax Applicability |
| --------------------------- | ------------------------------------------------------------------------ |
| Purchase and resale of plot | No service tax |
| Construction of low wall | Service tax applicable under Works Contract Service if threshold crossed |
---
If you want, I can also explain how the tax is calculated on works contract or clarify about abatement rates for construction services!
---
### 1. **Sale of Plot (Land)**
* Sale of **pure land or plot** is **not subject to service tax** or VAT.
* Land is considered an immovable property, and the sale of land is treated as a **sale of goods (immovable property)** and not a service.
* So, just buying and selling a plot—no service tax.
---
### 2. **Construction of Low Wall / Improvement on Plot**
* If you construct something on the plot (like a low wall), it may amount to **“Works Contract Service”** if the value crosses the threshold.
* Service tax is applicable on **works contract service**, which covers construction, installation, repair, or renovation activities.
* The tax is payable on the service portion of the contract value (deducting value of materials).
---
### 3. **Whether it attracts Works Contract?**
* Yes, **construction of low wall** on the plot will be covered under **Works Contract Service**.
* If you sell the plot after constructing the wall, the construction part is treated as a taxable service (if threshold limits are exceeded).
* The sale of plot itself is not taxed, but the construction service on the plot is taxable.
---
### 4. **Threshold limit**
* You must register and pay service tax if your aggregate taxable service turnover exceeds ₹9/10 lakhs in a financial year.
---
### **Summary:**
| Activity | Service Tax Applicability |
| --------------------------- | ------------------------------------------------------------------------ |
| Purchase and resale of plot | No service tax |
| Construction of low wall | Service tax applicable under Works Contract Service if threshold crossed |
---
If you want, I can also explain how the tax is calculated on works contract or clarify about abatement rates for construction services!
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