TaxTMI 
TaxTMI 
Dear Sir,
Kindly confirm the related notification as per which Service tax applicable on amount received by builder through civil court settlements due to dispute between builders and pramoters
J.S. Uppal
Related Service Tax Notification
01 Aug 2012 
2 Replies 
1210 Views Asked by
Service tax applicability may not extend to court-ordered settlement amounts; assess underlying construction-service liability and relevant period.
Whether service tax applies to amounts received by a builder through civil court settlements is unclear; settlement receipts may not be taxable as they arise from court-ordered compromise rather than payment for a service. However, if the underlying dealings involved taxable construction activity, potential liability under Construction of Residential or Commercial Complex Service and the relevant tax period must be examined; additional factual clarification is required to determine exposure. (AI Summary)
Whether service tax applies to amounts received by a builder through civil court settlements is unclear; settlement receipts may not be taxable as they arise from court-ordered compromise rather than payment for a service. However, if the underlying dealings involved taxable construction activity, potential liability under Construction of Residential or Commercial Complex Service and the relevant tax period must be examined; additional factual clarification is required to determine exposure. (AI Summary)