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 Clarified: Builder Must Charge Tax on Construction Services, Not on Landowner's Share in Sale Proceeds. A query was raised regarding the applicability of service tax in a collaboration where a landowner and a builder share proceeds from the sale of a residential or commercial complex. The question was whether the builder must charge service tax on the construction costs related to the owner's share. The response clarified that the service tax obligation falls on the individual providing construction services, not on the person who commissions the construction through a contractor. Thus, such a collaboration does not affect the service tax liability.