Whether service tax is applicable on commercial complex consturction under joint venture agreement. The owner of the land enteres into an agreement with the builder for making available his land on which commercial complex will be constructed. The construction expenses are met by the builder and the built complex will be shared between the land owner and the builder in the agreed proportion.
Service Tax Applies to Joint Venture Construction of Commercial Complex, Clarified by CBEC Circular on Valuation Details A query was raised about the applicability of service tax on the construction of a commercial complex under a joint venture agreement. In this arrangement, a landowner provides land to a builder, who covers construction expenses, and the completed complex is divided between them. Two responses clarified that service tax is applicable. One response referenced a CBEC circular stating service tax is due if the builder receives land or development rights before the building's completion certificate. The other response confirmed the tax's applicability and suggested referring to a recent circular for valuation details. (AI Summary)
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