Construction industry

Queries 3962 views 4 replies

nitten

30 Points Joined July 2010

Required clarification regarding Service Tax Payable for Construction Industry

For Eg:

XYZ (Builder) entered into an agreement for construction of Complex with ABC (Landlord). There is allocation of Units between XYZ & ABC. During the course of Construction XYZ, sales his part to the tentative customers & takes money from them as per the Payment Schedule & deposited the service tax thereon on the amount received/billed.

Here, ABC, being the Landlord also sells his part during the course of construction to different purchasers and takes money from them as per the Schedule.

Now, the question arises as is service tax chargeable on the Landlords Part?

If yes, then who is liable to pay the service tax?

Landlord has not taken any service tax registration on his name?

If no, then under which section of Service Tax, we can find the same?

Replies (4)

GAUTAM SHARMA

Audit Assistant

353 Points Joined May 2010

Landlord is not laible to pay ST service Excludes"A trasaction merely involve transfer of rifht in goods or immovable property." Immovable Property is defined in general Clause Act

Prabhat Kumar

Advocate & Consultant

1912 Points Joined July 2009

Regarding your query I assume that it is residential complex,not constructed for personal use and it has more than 12 units.After construction unit is devided between landlord and devloper and before completion certificateis granted,units are sold to third party.Here Service Tax is to be paid and the same is to be paid by the service provider i.e the devloper.

nitten

30 Points Joined July 2010

@ Prabhat Kumar:

Thank you for your reply. The Construction is for sale and not for self use. There is still some confusion. The Units are already taken by the landowners & he is selling the Units by making deed of agreement with the purchasers. Now, my question is who will bear the service tax for the units sold by the Landowner. The construction is still going on & its not yet complete.

Prabhat Kumar

Advocate & Consultant

1912 Points Joined July 2009

No confusion.In your case devlopment rights of the land was received by the builder/devloper and so Service Tax is required to be paid by the builder(circular No.152/2/2012 S.T dated10-2-2012).