Leviability of Service Tax on land developers

[Meenakshi Kapoor]

Is service tax leviable on land developers who are engaged in selling plots after land levelling, road construction etc.

[Surender Gupta]

There is no service tax on selling activity. If a land developers who are engaged in selling of plots after land levelling, road construction etc. is not liable to service tax.

[Guest]

The question here is that whether land developer is providing any service to the buyers of the land/plots. The answer is no because he is merely selling developed plots. However if the developer of the land engages an outside party to get the work of the site formation and clearance done then a question may arise whether he (developer) is receiving the taxable service of site formation and clearance from such outside party. This will depend upon the facts of the case. But certainly the land developer is not liable to pay any service tax under the category of site formation or ny other taxable service. One cannot provide service to oneself.

AI Summary

Selling Developed Plots Not Subject to Service Tax; Developers Not Providing Taxable Services to Buyers. A query was raised about the applicability of service tax on land developers involved in selling plots after activities like land leveling and road construction. Two responses clarified that selling plots does not attract service tax. One response emphasized that the developer is not providing a service to buyers, as they are merely selling developed plots. Another response noted that if a developer hires an external party for site formation, there might be a question of receiving taxable services, but generally, the developer is not liable for service tax under site formation or any other category.