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Service tax on land development

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DIPENDRA JAIN

PARTNER

24 Points Posted on 27 August 2012

My question is whether a person who owns the land and develop the propety

case 1.Do not charge the development charges seperately.

Case 2.If charged seperately.

Further if the developer is other perosn what would be the position and who will pay the tax.

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Guest

SERVICE TAX

By the Finance Act, 2010 the Government has amended the definition of Commercial or Industrial Construction Service [Section 65 (25b) read with Section 65 (105) (zzq)] and construction of Residential Complex [Section 65 (30a) read with Section 65 (zzzh)].

The scope of these categories is expanded to cover sale of flats/units under construction. Builders/developers are now liable to service tax if any payment towards sale consideration is received before the grant of completion certificate by the competent authorities for such flats/units. This amendment overrides the Gauhati High Court’s decision in the case of Magus Construction Private Limited v/s UOI [2008 11 STR 225].