Service tax on plot

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Yash Somani (Querist)
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21 December 2013 I am purchasing a plot and selling it after constructing some low wall so is it covered under service tax.

CA DHEERAJ

CA DHEERAJ (Expert)
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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

Arun Kumar Singh

Arun Kumar Singh (Expert)
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22 December 2013 No need to pay service tax.

Yash Somani

Yash Somani (Querist)
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23 December 2013 but if i am constructing service that will be liable to service tax?

CA DHEERAJ

CA DHEERAJ (Expert)
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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

Yash Somani

Yash Somani (Querist)
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23 December 2013 But whether does it attract Works Contract???

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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24 July 2025 Here’s the clear position on **service tax related to sale of plot with some construction (like a low wall):**

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### 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.

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### 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).

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### 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.

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### 4. **Threshold limit**

* You must register and pay service tax if your aggregate taxable service turnover exceeds ₹9/10 lakhs in a financial year.

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### **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 |

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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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