Residential complex test: independent villas on separate plots are not taxable merely because they share common amenities.

Independent villas or houses built on separately identified plots under separate agreements do not, by themselves, constitute a residential complex for service tax purposes. The statutory definition under Section 65(91a) of the Finance Act, 1994 applies only where the cumulative requirements are met: more than twelve residential units, a common area, and specified facilities within premises whose layout is approved by the competent authority. A gated community, common project name, or shared amenities is not sufficient on its own. On the facts described, such construction was outside the residential complex category, so service tax could not be levied on that basis.

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Issues: Whether construction of individual villas or houses, carried out on separately identified plots under separate agreements and approvals, but situated in a larger layout with common amenities, amounts to construction of a residential complex so as to attract service tax.

Analysis: The relevant statutory test under Section 65(91a) of the Finance Act, 1994 requires, cumulatively, a building or buildings having more than twelve residential units, a common area, and one or more specified facilities within premises whose layout is approved by the competent authority. The material on record showed that each buyer had an identified plot, obtained approval in his own name, and engaged the appellant through separate construction arrangements. The existence of a gated community, common project name, or shared amenities did not satisfy the statutory definition by itself. Following the consistent view taken in prior coordinate bench decisions on materially similar facts, independent villas or houses do not become a residential complex merely because they are developed in a planned layout with common facilities.

Conclusion: The activity did not amount to construction of a residential complex and was not liable to service tax on that basis; the demand, interest, and penalties could not be sustained.

Ratio Decidendi: Independent residential houses or villas constructed on separately identified plots under separate agreements do not fall within the definition of a residential complex unless the statutory cumulative requirements of Section 65(91a) are satisfied.

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