Service tax on builders and developers

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A Builder has entered into an agreement with the owner of land for development of residential complex on the land. All the houses will be sold by builder only and he will pay a certain percentage of the total receipts to the land owner as a consideration. The Builder is also a contractor so,he himself will construct the houses. Now the Builder is applying for the registration for VAT and service tax so, whether the service of Builder(who is also contractor) will be considered as works contract service or construction service?
Replies (3)

It will be a construction service.

ok.. Will it be liable for VAT? and if yes then It will come under the definition of works contract.

If you are planning to avail abatement of 70/75 % (as applicable)  by including value of land as part of your consideration, you shall register under Construction of Residential Complex services.

 


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