Service tax to Joint venture of consturction

[Sunil M D]

Dear All,

Request you to provide your opinion on the below query.

Facts :

There is an agreement between Landowner (A) and developer (B) for construction of residential complex consisting of 20 flats.

A’s share – 40 % i.e. 8 flats.

B’s share – 60 % i.e. 12 flats.

B is receiving consideration for 12 flats

B is collecting service tax from the buyers @ 3.09%( availing the abetment of 75%)and depositing the same.

A is receiving the consideration of 8 flats.

Now the question is:

1) Who will collect and pay the service tax on 8 flats sold by A ?

2) Will there be any service tax liability on B towards service provided to A for construction of 8 flats ?

If yes, how to calculate the amount ?

3) Suppose the developer ( B ) provides other services like painting, flooring etc to the individual buyer’s, what will be service tax liability of B ?

AI Summary

Clarification on Service Tax Liability in Construction JV: Developer B Responsible for Landowner A's Flats Under Section 66E A construction joint venture between a landowner (A) and a developer (B) involves the construction of 20 flats, with A receiving 8 flats and B receiving 12. B collects and deposits service tax from buyers for its share. The queries raised concern who is responsible for collecting and paying service tax on A's 8 flats, B's service tax liability for constructing A's flats, and the tax implications for additional services like painting. Responses indicate B should pay service tax for A's flats, with the value based on comparable sales or construction cost. Additional services may incur service tax depending on their nature and timing.