A builder has developed a multi storey building consisting of 12 residential flats. He has sold a few in pre-construction stage and others post completion.Can he or should he charge service tax on sale price of flats sold post completion? Is service tax leviable on post completion flats, in case some of the flats in the same complex were sold in pre construction period?
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Service tax on residential flats
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Once the builder obtains completion certificate from appropriate authority, the service element in construction of flats is completed. Any sale after such act, provided, no consideration was received by builder during construction period towards flat, will purely be sale. No service tax can be levied. It will sale of immovable property.
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