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Real estate development business

DINU SUKUMAR (Audit Manager) (176 Points)

31 March 2014

Hii All,

I would like to discuss the taxability of portion of building transferred to land owner as per joint venture agreement in the case of real estate development business. As per Govt. stand, it is taxable. I am requesting for you all for your valuable advises. Regards

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Sumit Grover (Chartered Accountant ) (3652 Points)
Replied 31 March 2014

Pl. refer Circular no. 151/2/2012-ST, dated 10th Feb'12 for the same.

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DINU SUKUMAR (Audit Manager) (176 Points)
Replied 31 March 2014

Thank You Sir. One of our client is engaged in real estate business. As per our advise they are not paying ST on land owners portion of building. We are advised them to pay service tax on the land portion and building portion both transferred by the company to their clients. The circular is there but the portion of building of the land owner is liable for ST is a disputable matter. Our clients are constructing building and transferred 50% to land owner as per joint venture agreement, as a consideration for this service the land owner giving us to 50% right on undivided share of land. We are paying service tax on this, that is consideration in land received for 50% share of building transferred to land owner. In this circumstances, we would like to bring the CBEC attention for avoiding the double taxation on us.