Liability of service tax - proportionate basis

[Chalapathy Rao Marthy]

Dear Sir, For example two parties say A and B holding two lands of different proportions say for example A 13% and B 87%. A is experinced in construction activity. B has agreed with A for developemnt of land by constructing a commercial building on the said land. Terms were such that after satisfactory completion of building B will register undivided share of land to A to the extent of 37% such that both will jointly own the building in the ratio of 50 % and 50%. In such case is 1. is A liable for service Tax 2. If answer to 1 is yes how valuation will be done.

AI Summary

Land Development Agreement Raises Service Tax Liability Questions for Equal Ownership Transfer Under Construction Deal Two parties, A and B, own land in different proportions (A: 13%, B: 87%). They agreed that A, experienced in construction, will develop the land into a commercial building. Upon completion, B will transfer an undivided 37% share of the land to A, allowing both to own the building equally. The query is whether A is liable for service tax and how it should be valued. One response suggests A is liable and should charge B based on the construction portion, while another emphasizes the need for detailed analysis to determine the transaction's nature.