Liability of builder to pay service tax -

[Guest]

I am of the opininon that a BUILDER is not liable for payment of service tax under 'construction of Residential complexes' if he constructs Apartments in his own land with his own labour and sells it after total completion of it to a prospective buyer. In case he registers the Apartment under semi finished stage to some buyer and enters into a development agreement with the buyer and completes the finishing worK on some remuneration , is the builder liable for service Tax. If so on what value he has to pay the tax?

[Madhukar N Hiregange]

Yes in this case he would no tbe liable for st under res complex. However for the construction after registering the semi finsihed portion he could be liable under works contract. The value would be the construction cost as the immovable property has already sufferred stamp duty.

AI Summary

Builders Not Liable for Service Tax on Completed Apartments; Works Contract Applies if Semi-Finished Units Sold First. A builder is not liable for service tax under 'construction of residential complexes' if they construct apartments on their own land with their own labor and sell them upon completion. However, if the builder registers the apartment in a semi-finished stage to a buyer and enters a development agreement to complete the construction for a fee, they may be liable for service tax under a works contract. The taxable value would be based on the construction cost since the immovable property has already incurred stamp duty.