TaxTMI 
TaxTMI 
Whether the builder has duty and responsibility to collect service tax from the Land Owners towards their respective share under the Joint Development Agreement?
Service Tax Liability
11 Mar 2016 
5 Replies 
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Service tax on construction services requires builders to account for tax on flats allotted to landowners when consideration precedes completion.
Service tax is payable where a builder/developer receives consideration as land or development rights before the completion certificate; construction service is taxable and the builder must account for tax on flats allotted to the landowner under a Joint Development Agreement, with the landowner treated as a service receiver. Consolidation of construction activities under Works Contract Service brings such transfers within taxable scope, and prior agreement dates do not eliminate the liability if the conditions for taxable construction service are satisfied. (AI Summary)
Service tax is payable where a builder/developer receives consideration as land or development rights before the completion certificate; construction service is taxable and the builder must account for tax on flats allotted to the landowner under a Joint Development Agreement, with the landowner treated as a service receiver. Consolidation of construction activities under Works Contract Service brings such transfers within taxable scope, and prior agreement dates do not eliminate the liability if the conditions for taxable construction service are satisfied. (AI Summary)