Service Tax Liability on self made residential apartment

[Mehul Pandya]

Sir,

I have purchased plot and started construction to prepare apartment for residential use. I will purchase all the required material and appoint labour on salary basis. I will pay them salary on daily basis by cash. Apartment will contain 15 flats. It will be completed after one and half year.

I have neither entered into any kind of sale agreement/contract to anybody nor received any advance from anybody. I intend to sell this flats after completion of all type of work and when it will become ready to use at the prevailing market rate at that time.

My query is in this case service tax is applicable or not. if yes when i have to take registration  under which category and how to calculate service tax.

Thank you

[Madhukar N Hiregange]

No liability under either VAT or Service tax in this case as long as it is genuine and evidence available.

AI Summary

Service tax exemption for self-constructed residential apartments where construction is genuine and evidence exists.
Where an individual constructs residential apartments on self-purchased land, using personally procured materials and salaried labour, and intends to sell after completion without prior sale agreements or advances, there is no liability under either VAT or Service Tax provided the activity is genuine and adequate evidence is available to substantiate that factual position.