BUILDER OF APARTMENT

[VEMULA CHANDRASEKHAR]

Dear sir please let me understand what is the status of a builder who is selling the flats in apartment. is there any exemption ( earlier I know that if no of flats does not exceed 12 no service tax is applicable)

with regards

[Ganeshan Kalyani]

Service tax is liable if the consideration is received before the completion certificate is received. Further exemption is only for single residential house.

[KASTURI SETHI]

Sh.Vemula Chandrasekhar must be satisfied with the reply dated 4.12.15 of Sh.Ganeshan Kalyani Sir.

[VEMULA CHANDRASEKHAR]

SIR NOT CLEAR. PLEASE EXPLAIN IN DETAIL.

[DR.MARIAPPAN GOVINDARAJAN]

The builder in this case has no exemption from service tax since it is applicable to only for single residence. Service tax is to be levied on the sales of flats by the builders.

[Ganeshan Kalyani]

After abatement service tax is applicable on 30% of value of contract price.

AI Summary

Service tax liability on apartment sales arises when consideration precedes completion certificate; tax applies after abatement.
Service tax is chargeable on a builder's sale of flats where consideration is received prior to issuance of the completion certificate; the residential exemption is limited to a single residential house and does not apply to builders. Tax is levied on the post-abatement portion of the contract value for such sales.