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The CESTAT held that the builder is not liable to pay service tax on receipt of entire consideration from the buyer after issuance of 'occupancy certificate' by the Vasai-Virar Municipal Corporation, as it falls under the exception provided in Section 66E(b) of the Finance Act, 1994. The term 'completion certificate' used in the exception includes 'occupancy certificate' issued by the competent municipal authority. The Ministry of Finance clarification dated 26.10.2015 is applicable to all municipal corporations, not limited to BMC. After receiving the occupancy certificate and selling the flats, the builder is not providing declared construction services to the buyers. Hence, the respondent was rightly not liable for service tax on sale of flats where consideration was received after issuance of occupancy certificate. Appeal dismissed.
The CESTAT held that the builder is not liable to pay service tax on receipt of entire consideration from the buyer after issuance of 'occupancy certificate' by the Vasai-Virar Municipal Corporation, as it falls under the exception provided in Section 66E(b) of the Finance Act, 1994. The term 'completion certificate' used in the exception includes 'occupancy certificate' issued by the competent municipal authority. The Ministry of Finance clarification dated 26.10.2015 is applicable to all municipal corporations, not limited to BMC. After receiving the occupancy certificate and selling the flats, the builder is not providing declared construction services to the buyers. Hence, the respondent was rightly not liable for service tax on sale of flats where consideration was received after issuance of occupancy certificate. Appeal dismissed.
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