Liability of ST on landlord's share in construction service

[onkar kumar]

Sir,

 

I have a query as under. A builders makes an agreement with landowner to built an apartment having more than 12 flat . As per agreement some of the flats is to be handed over to landlord after completion of the project and rest is to be sold by builder. I want to know whether there is service tax liability on the flats handed over to the landlord as his share? If yes, at which point of time liability occurs? how the value will be determine?  

Thank You

[sanjeev bajaj]

Please refer to circular no. 151/2/2012-ST.  It depends on the facts and agreement.

AI Summary

Service tax on in kind transfers to landowners depends on the agreement and circular guidance for liability and valuation.
Service tax liability on flats transferred to a landowner as his share is fact dependent and governed by the parties' agreement; timing and valuation of any tax liability must be determined in light of that agreement and administrative guidance in circular no. 151/2/2012-ST.