Service tax for purchase of semi-finished flat

(a) Since you have bought flat from land owner , no ST is chargeable in transaction b/w you and land owner.

(b) However, land owner may recover the ST paid by him to builder.The ST chargeable in case of residential complex is Amt charged (-) 75% abatement , provided the Amt charged <=1 crores and carpet area of flat<=2000sq feet....otherwise 70% abatement.

Dear Mr.Saurabh,

Thank you for the reply.

The service tax will be calculated on the govt. sale deed value of 30 lacs ( on which stamp duty & regn charges have been paid to the govt.) OR on the total sale consideration of 60 lacs ? As I have mentioned in my query, total sale consideration for the flat is 60 lacs.  30 lacs thru sale deed and balance 30 lacs thru agreement of construction. Please advice.

Thanks.

Sandeep ji.. as you have already asked aked question in two part in your case there are two seprate conditions

(i) 1st 30L for Sale on which you have paid the Stamp duty and registration charges is "Transfer of Title of immovable property" from Previous land owner to you..... which is out of definition of "Service" as per Section 65B(44) inserted by Finance Act, 2012 

(ii) 2nd 30L is for Cunstruction of Flat which is covered under the service tax there is an element of "Cunstruction Service" there is Exemption to "Single residential unit"  & "Construction of low cost houses carpet areya upto 60Sq. meters but it is not applicable for your case as you have mention that constructor is building 4 floor aprtment of 8 flats so you have to Pay service tax in 30L @ 12.36% (abetment is not availabe to you, in case you want to avail abetment @ 75% than pay service tax on whole 60L)

Sandip,

A) There is a transfer of immovable Property, therefore there will be no amount of service tax charged by the Land owner.
B) Service tax is Charged on Construction Services provided by the developer provided such services are provided before completion certificate is issued by the relevant autority.

C) Here the Service recipient would be the Land owner and not you, therefore service tax would be charged by the developer on the Services provided to the Recipient.
D) Service tax would be on the Consideration received by the Service Receiver which may be in form of  Land development Rights and in form of Flats alloted to the Developer for Developing such Land.

Manish ji,

Title of property is now transferd to Sandeep now he is land owner. 

And whether it is recovered from Sandeep or from Previous Owner ultimetly the cost of property is going to increase and of course it will be burden on last consumer/custmer whoever will it be.

So who is paying to the service provider is not so material (in this case) becouse it will be recovered from the nextone.  

The point is whether it is applicable....?   & How much Extra burden it will impose.

Shiv Prakash,

I reckon this Relates to the Tripartite Model, which includes the Land owner, the developer and ultimately the Customer, in which the Land Development rights are transfered to the Developer which in Exchange gives Consideration in form of money or Share in revenue from sale of flats to the Land owner.
To conclude if the above information given by sandip ji realtes to the above model, then service tax would come into Picture.
Otherwise as Dipak ji Described, if the Land owner just receives services from the Developer, who construcs a building for the land owner, whichis later sold by the land owner to the Customers, then the amount paid by the ultimate customer would not be chargeable to Service tax.