I would like to know the status of levy of service tax on appartments after the circular
dated 23rd August, 2007, if there is no sub contract in the builders construction.
Could anybody, please kindly guide me in this concern.
Whether, we need to pay service tax on the appartments constructed by a builder or not.
079.01 /
23.08.07
Whether service tax is liable under
construction of complex service [section
65(105)(zzzh)] on builder, promoter,
developer or any such person,-
(a) who gets the complex built by
engaging the services of a separate
contractor, and
(b) who builds the residential complex on
his own by employing direct labour?
(a) In a case where the builder, promoter,
developer or any such person builds a
residential complex, having more than 12
residential units, by engaging a contractor for
construction of the said residential complex,
the contractor in his capacity as a taxable
service provider (to the builder / promoter /
developer / any such person) shall be liable
to pay service tax on the gross amount
charged for the construction services under
‘construction of complex’ service [section 65
(105)(zzzh)].
(b) If no other person is engaged for
construction work and the builder / promoter /
developer / any such person undertakes
construction work on his own without
engaging the services of any other person,
then in such cases,-
(i) service provider and service recipient
relationship does not exist,
CAclubindia
