Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: empanelment :: articles on VAT and GST in India :: VAT Audit :: cpt :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARDS :: form 3cd :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: due date for vat payment :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
Service Tax »
 A 5-Point Guide For Buyers To Understand The Effect Of GST On Real Estate
 Stalled unsorted diamond imports to resume after GST rate revision
 TDS, TCS deductors can apply for GST registration from 18 September
 E-commerce companies face tax heat as I-T department says discounts should be treated as capital spend
 Central Goods and Services Tax (Sixth Amendment) Rules, 2017
 GST will also impact direct tax collection
 Seeks to extend time period for filing of details in FORM GSTR-6 for months of July & August
 GST: Is input tax credit available for tax paid on mobiles given to staff?
 GST filing, reconciliation solution launched
  Finance Ministry asks taxmen to submit note on high-pitched assessments
 Step by Step Guide for GST Enrolment for existing Central Excise / Service Tax Assessees

Flat buyers exempt from service tax
February, 03rd 2009

The Central Board of Excise and Customs (CBEC) has made it clear that flat buyers, developers and builders are not liable to pay service tax.

In a circular (F.No.137/12/2006- CX.4) issued on January 29, the board has said that generally, the initial agreement between the developer (promoter/builder) and the buyer is an "agreement to sell". As per provisions of the Transfer of Property Act, this does not "create any interest in or charge on such property".

It is only after the construction is completed and the agreed sum is paid that a sale deed is executed, transferring the ownership of the property from the builder/developer to the buyer, the board has said.

Any service provided by the developer during the construction of a residential complex -- before the execution of the sale deed -- would be "self-service" and, consequently, not attract service tax, the board has clarified.

If the buyer enters into a contract for construction of a residential complex for personal use with a developer (promoter/builder), who provides design, planning and construction, then such an arrangement would also not invite service tax.

Flat buyers don't need to pay service tax
It is excluded from service tax under the definition of "residential complex", the board has said.

However, in both these situations, if services of a contractor, designer or a similar service provider are taken, then such persons would be liable to pay service tax, the circular says.

The board has clarified that the builder is not a service provider and, hence, not liable to collect service tax. But contractors or designers engaged by the builder should charge service tax from him.

The Authority for Advance Ruling had in the case of Hare Krishna Developers ruled that the builder/developer was liable to pay service tax.

But in the case of Magus Construction Pvt Ltd, the Gauhati high court had ruled that the builder/developer was not liable to service tax.

The two conflicting judgments had created confusion, which the CBEC circular has now put to rest.

Mehul Sheth is a practicing chartered accountant in Mumbai.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - About Us

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions