Valuation of Land in Case of Commercial Complex

[Arif Kathiria]

Dear Sir,

My Client is engage in business of Construction of Commercial Complex, Sales Agreement for shops and godowns were made during the period 01-04-2015 to 30-06-2017.

Value of Land for valuation purpose for service tax can be excluded ?

[KASTURI SETHI]

If Service Tax is paid by claiming abatement of 70% from the gross receipt (consideration) as per serial no. 12 of Notification No.26/12-ST dated 20.6.12 as amended, the value of land will be included in the gross amount charged. If abatement is not claimed, the value of land, will not form part of taxable value.

Also go through Rule 2 A of Service Tax (Determination of value) Rules, 2006 as amended from time to time up to 13.4.2016.

AI Summary

Clarification on Land Valuation for Service Tax in Commercial Complex Sales (2015-2017); Refer to Rule 2A. A discussion on the valuation of land for service tax purposes in the context of constructing a commercial complex. The query involves whether the value of land can be excluded from the service tax valuation for sales agreements made between April 1, 2015, and June 30, 2017. The response clarifies that if service tax is paid with a 70% abatement from the gross receipt under a specific notification, the land value is included in the gross amount. Without claiming abatement, the land value is not part of the taxable value. Reference to Rule 2A of the Service Tax Rules is advised.