Charge of Service Tax

[amitosh moitra]

If I collaborate with the owner of land to build a res complex/commercial complex to which service tax is attracted, and the terms of collaboration is that both, I and the owner of land equally share the sale of space proceeds, Do i have to charge service tax and raise a bill on the amount I spend on construction of the owners share?

[Ravi Chopra]

Service tax is liable to paid by the person who is engaged and providing construction services. It is not upon the person who gets the building constructed from a contractor. Therefore such collaboration is of no use at all.

AI Summary

Service tax liability: the party providing construction services remains taxable even when sale proceeds are shared under collaboration. Liability to pay service tax arises from provision of construction services; the party who performs or engages the construction activity is liable. Sharing sale proceeds under a collaboration does not alter the tax incidence, and a landowner who only receives a share of proceeds is not liable unless they actively undertake or procure the construction services.