TaxTMI 
TaxTMI 
2014 (4) TMI 587
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....nd in our opinion, the details covered by the learned counsel and after consideration of the records by us, is sufficient to arrive at the final decision at this stage itself. Accordingly, we dispense with the requirement of predeposit and take up the appeal itself for final decision. 2. Appellant is a builder/developer of commercial and residential complexes and has projects in many parts of the country. The present case before us relates to a project Project Celestia in Hyderabad. The appellants registered themselves under state VAT law as well as under Finance Act, 1994 for payment of VAT and Service Tax on works contract service from April 2009 onwards. Appellants entered into development agreements with vendors/land owners to develo....
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....mplex and it was also their claim that they were selling the apartments to the buyers. He observed that the appellants emphasized that works contract service is more specific than construction of residential complex is general. The learned counsel also submits that the observation of the Commissioner in para 17.5 that it is on record that appellant entered into individual contracts in 2 stages with the buyers of flats. The first one is for undivided share of the land and second is for construction of the flat. He observes that since the appellants were selling individual flats and not the complete residential complex, the services provided by them could not have been classified as works contract since there cannot be several works contracts....
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....g and wall papering, wood and metal journey and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alternation, renovation or restoration of, or similar services in relation to, residential complex; 5. After the amendment of the definitions w.e.f. 01/07/2010, the liability arises even when the flats are sold to individual buyers and the definition of construction of residential complex continues to be applicable to cases where a single complex has more than 12 apartments. Therefore the Commissioners observation is totally incorrect and contrary to the provisions of law as submitted by the learned counsel. We are unable to agree or we are unable to f....
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....he agreement between the promoter/developer and the flat purchaser is to construct a flat and eventually sell the flat with the fraction of land, it is obvious that such transaction involves the activity of construction inasmuch as it is only when the flat is constructed then it can be conveyed. We, therefore, think that there is no reason why such activity of construction is not covered by the term works contract. After all, the term 'works contract' is nothing but a contract in which one of the parties is obliged to undertake or to execute works. Such activity of construction has all the characteristics or elements of works contract. The ultimate transaction between the parties may be sale of flat but it cannot be said that the characte....
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....Even in those composite contracts which are by legal fiction deemed to be divisible under Article 366(29-A), the value of the goods involved in the execution of the whole transaction cannot be assessed to sales tax'. Having said that, the Court also stated that the States were not competent to include the cost of service in the value of the goods sold (i.e. the sim card) nor the Parliament could include the value of the sim card in the cost of services. But the statement in para 92(C) of the Report is clear that it is upto the States to tax the sale of goods element in a composite contract of sale and service. Bharat Sanchar5 thus supports the view that taxation of different aspects of the same transaction as separate taxable events is perm....