TaxTMI 
TaxTMI 
TaxTMI 
Land owner enter an agreement with builder for building apartments. As a consideration, builder agrees to allocate few fully furnished flats to the land owner on free of cost.
please let us know the applicability of service tax.
regards
Saravanan.
Service tax applicability
SARAVANAN RENGACHARY
Service Tax Applicable on Fully Furnished Flats Received as Consideration in Land Agreement, Clarified by Circular No. 151/2/2012-ST. A discussion on service tax applicability arose when a landowner entered an agreement with a builder to receive fully furnished flats as consideration for land, questioning if these flats are free of cost. Multiple respondents clarified that service tax is applicable under Works Contract Service because the construction service is a taxable service. They referenced Circular No. 151/2/2012-ST from the Central Board of Excise & Customs, which provides guidance on valuation and taxation. The consensus among participants was that the service tax is indeed applicable, supported by recent circulars and expert opinions. (AI Summary)