Sales Tax and Service Tax levied on Builders & developers

Circular no. 96/07/2007 ST dated 27.08.07.

1. Where any builder/promotor/developer or any other person build a residential complex (,ore than 12 units) by engaging other builder/developer/contractor, ST will be applicable

2. Where no other person is engaged in development/construction then no ST will be applicable (absence of service provider and service receiver relationship)

Circular no. 108/02/2009 ST dated 29.01.2009

Issue: Where developer/builder/promoter enters into an agreement with the ultimate owner for selling a dwelling unit in a resindential comples at any stage of construction (or even prior to that) and who makes construction linked paymet- Whether ST applicable.

Clarification: ST would not be applicable (existence of "self service" and some due to exemption)

For more clarity please read the circulars.