Liability of Service Tax on the Land lord for the Construction of residential complex

[THYAGARAJAN KALYANASUNDARAM]

Dear Expert,

One of my client has planning to enter agreement with the builder for constructing the resident which will be consist of more than one kitchen. And the land lord before entering into agreement with the builder, he is planning to the settle the entire property to his wife and his children throgh the execution of settlement deed and register with the respective registering authority. subsequently, each and every family member seperately enter the agrreement with the same builder for contract the building.

1. My question is there any violation of service tax.

2. If he do so, any service tax liability will come in the future. The building is going to be consist of more than one kitchen. However, the family members are individualy enter the agreement with the builder for each flat.

can any one suggest the suitable answer with cited case laws.

[KASTURI SETHI]

Dear Sir,

Construction of a single residential unit is exempted from Service Tax vide Notification No.25/12-ST dated 20.6.12 as amended. [See entry No.14 (b) ].

[Ganeshan Kalyani]

Sir, I agree with the reply submitted by Sri Kasturi Sir. Construction of single residential property is enumerated under exemption notification. Thanks.

AI Summary

Service tax exemption for construction of single residential units applies to individually contracted family flats. The query asks whether transferring land to family members and each member entering separate agreements with a builder for individual flats creates service tax liability. The respondents state that construction of a single residential unit is exempt under the referenced notification, and thus apply that exemption to construction undertaken pursuant to individually executed agreements for residential units.