Service tax on real estate transaction
This query is : Resolved
06 February 2008
A ltd is land owning company. Company recd licence for development of plot. Before development,demarcation company has entered into agreement to sell with B Ltd. for sale of 80 % plots. B Ltd. has given part consideration for this with a understanding that he can nominate any other person. After this agreement B Ltd. has entered into agreement with individual buyer for purchase of flat.
B ltd received his profit and money (which he has given to A Ltd.) and he nominate to individual buyer.
A ltd. will directly register the plot in the name of individual buyer.
Now my question is that Whether B Ltd. is liable for service tax on profit earned by him above ?
Whether he will be treated as Service Tax Agent ?
B ltd received his profit and money (which he has given to A Ltd.) and he nominate to individual buyer.
A ltd. will directly register the plot in the name of individual buyer.
Now my question is that Whether B Ltd. is liable for service tax on profit earned by him above ?
Whether he will be treated as Service Tax Agent ?
S.Srinivasaraghavan
(Expert)
06 February 2008
1.If the agreements are only for purchase and sale of plots, where is the question of service tax?
2. When B is not the owner of the plots, how does B enter into agreement with individual buyer? In wha capacity?
2. When B is not the owner of the plots, how does B enter into agreement with individual buyer? In wha capacity?
06 February 2008
SERVICE TAX IS LEVIED ON PROVIDING ANY TAXABLE SERVICE IN TERMS OF SERVICE TAX ACT.PL. REFER below website for details AS TO WHAT IS A TAXABLE SERVICE.THERE ARE AT PRESENT 105 TAXABLE SERVICES UNDER SERVICE TAX ACT.
www.servicetax.gov.in
B LTD AS UNDERSTOOD FROM YOUR QUERY MUST HAVE UNDERTAKEN SALE OF PLOTS WITH A POWER OF ATTORNEY FROM A LTD. TO SELL PLOTS TO BUYERS AS THE OWNER IS A LTD.
SO B LTD. WHATEVER IT EARNS IS LIABLE UNDER INCOME TAX ACT.NOT UNDER SERVICE TAX ACT.
R.V.RAO
www.servicetax.gov.in
B LTD AS UNDERSTOOD FROM YOUR QUERY MUST HAVE UNDERTAKEN SALE OF PLOTS WITH A POWER OF ATTORNEY FROM A LTD. TO SELL PLOTS TO BUYERS AS THE OWNER IS A LTD.
SO B LTD. WHATEVER IT EARNS IS LIABLE UNDER INCOME TAX ACT.NOT UNDER SERVICE TAX ACT.
R.V.RAO
07 February 2008
IF B IN ANY WAY DOING A SORT OF MARKETING THEN HE MAY BE COVERED UNDER SERVICE TAX UNDER BUSINESS AUXILIARY SERVICES
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