TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1670
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....g service tax on the service of construction of apartments rendered by him for the period 16.06.2005 to March 2009. Based on the terms and conditions of the agreement entered by the appellant with his clients proved that the appellant was rendering services under construction of residential complexes and accordingly, taking into consideration the purchaser agreements and the payments, the Commissioner in the impugned order upheld demand of service tax under the taxable category of 'Construction of Complex Service'. He also upheld the demands under 'Management, Maintenance or Repair Service' and 'Real Estate Agents Service'. Aggrieved by this order, the appellant is in appeal before us. 3. The Learned Counsel at the time of hearing submitted that he is not disputing the amounts paid under the category of Real Estate Agents Service which has already been paid and appropriated by the Commissioner in the impugned order. The appellant is aggrieved only on two issues; one is with regard to liability to pay service tax under 'Construction of Residential Complex Service' during the period in dispute; and the second one is liability to pay service tax collected as reimbursable amounts from....
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....ted the findings of the Commissioner to submit that the appellants were liable to pay tax on the services rendered by them and also on reimbursable expenses. 5. Heard both sides. The period of dispute is from 16.06.2005 to 31.03.2009 and the issue to be decided is whether the appellant is liable to pay tax on 'Construction of Residential Complex Service' and the reimbursable expenses received as 'After Sales' payment under the category of 'Management, Maintenance or Repair Service'. The issue regarding 'Construction of Residential Complex Service' is no longer res integra as this issue stands settle vide Board Circulars dated 29.01.2009 and 10.02.2012 as well as by various decisions relied upon by the appellant. In one such case, in the case of Krishna Homes Vs. CCE, Bhopal (supra), this Tribunal held as follows: "8. Coming first to the question as to whether the activity of M/s. Krishna Homes and M/s. Raj Homes was taxable during the period of dispute or not, by Finance Act, 2005, Clause (zzzh) was introduced into Section 65(105) of Finance Act, 1994, so as to bring within the purview of the term 'taxable service', a service provided or to be provided to any person by any other....
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....engaging a contractor for construction of such residential complex, the contractor shall be liable to pay Service Tax on the gross amount charged for the construction service provided to the builder/promoter/developer under construction of complex service falling under Section 65(105)(zzzh) of the Finance Act, 1994 and that if no person is engaged by the builder, promoter, developer for construction work who undertakes construction work on his own without engaging the services of any other person than in such cases, in absence of the service provider and service recipient relationship, the question of providing taxable service to any person by any other person does not arise. W.e.f. 1-7-2010 an explanation was added to Section 65(105)(zzzh) which was as under :- "Explanation. - For the purposes of this sub-clause, the construction of a new building which is intended for sale, wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or the person authorized by the builder before grant of completion certificate by the authority c....
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....spective". 9. In view of the above, though in view of the Apex Court judgment in the case of M/s. Larsen & Toubro Limited and Others v. State of Karnataka & Others (supra), the agreements entered into by a builder/promoter/developer with prospective buyers for construction of residential units in a residential complex against payments being made by the prospective buyers in instalments during construction and in terms of which the possession of the residential unit, is to be handed over to the customers on completion of the residential complex and full payment having been made, are to be treated as works contracts, it has to be held that during the period of dispute, there was no intention of the Government to tax the activity in terms of such contracts a builder/developer with prospective customers for construction of residential units in a residential complex. Such works contracts involving transfer of immovable property were brought within the purview of taxable service by adding explanation to Section 65(105)(zzzh) w.e.f. 1-7-2010, and therefore, it has to be held that such contracts were not covered by Section 65(105)(zzzh) during the period prior to 1-7-2010". 5.1 Similarl....
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....he builder or promoter and any service provided by him towards construction is in the nature of self service. It has also been argued that even if it is taken that service is provided to the customer, a single residential unit bought by the individual customer would not fall in the definition of 'residential complex' as defined for the purposes of levy of service tax and hence construction of it would not attract service tax. 3. The matter has been examined by the Board. Generally, the initial agreement between the promoters/builders/developers and the ultimate owner is in the nature of 'agreement to sell'. Such a case, as per the provisions of the Transfer of Property Act, does not by itself create any interest in or charge on such property. The property remains under the ownership of the seller (in the instant case, the promoters/builders/developers). It is only after the completion of the construction and full payment of the agreed sum that a sale deed is executed and only then the ownership of the property gets transferred to the ultimate owner. Therefore, any service provided by such seller in connection with the construction of residential complex till the execution of such....
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....the builder/ developer before the issuance of completion certificate and the service tax would be required to be paid by builder/developers even for the flats given to the land owner. 8. This Tribunal taking note of the aforesaid circulars in CC,CE&ST Vs. Pragati Edifice Pvt. Ltd. (supra) case, summarised the findings as follows : - 11. .... ... ... 9. In view of the above, though in view of the Apex Court judgment in the case of M/s. Larsen & Toubro Limited and Others v. State of Karnataka & Others (supra), the agreements entered into by a builder/promoter/developer with prospective buyers for construction of residential units in a residential complex against payments being made by the prospective buyers in instalments during construction and in terms of which the possession of the residential unit, is to be handed over to the customers on completion of the residential complex and full payment having been made, are to be treated as works contracts, it has to be held that during the period of dispute, there was no intention of the Government to tax the activity in terms of such contracts a builder/developer with prospective customers for construction of residential units in a....