please clearify the taxability of service tax on real estate developer, if promoter and developer is same person.
person is purchasing land and then constructing and after development it sells.
person is purchasing land, constructing and side by side selling. what will be the tax implications?
service tax, vat, etc?
thanks
gurpreet singh
It is a litigatory matter, and suggest you to consult a professional in this respect...
However, you may note the following-
1. Service Tax: since you are land owner, the Service tax would be applicable @ 3.09% i.e., after abatement of 75% as per Notification No.26/2012-ST dated 20 June 2012; provided no cenvat on inputs is claimed.
2. MVAT : You have the option to levy MVAT @ 1% on the total value u/s. 42(3A) of the MVAT Act, 2002.
if land owner & devloper is the same person, and he sells the unit after obtaining completion certificate from competent authorities and entire consideration is obtained after that, there will be no tax liability. Otherwise it will be taxable. Tax will be paid on 25% of gross value received or to be received including value of land.
Input credit can be taken of input service and capital goods but not of duty paid on input goods. Sr. No. 12 of notification no. 26/2012 ST dated 20/06/2012
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