Latest Expert Exchange Queries
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) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: cpt :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: form 3cd :: VAT RATES :: list of goods taxed at 4% :: VAT Audit :: articles on VAT and GST in India :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: TDS :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
« Service Tax »
 Goods and Services Tax: There should not be more than three grades of rates, says Chidambaram
 Chidambaram says there cannot be multiple tax slabs in GST
 Service tax officials transferred for favouring realtor
 GST, a challenge and opportunity for accounting professionals’
 Service Tax On Hotels And Restaurants – Recent Delhi High Court Judgment
 GST Council discusses 4-tier tax rate, cess on demerit goods
 Why you shouldn’t miss these three simple tax saving options beyond Section 80C
 Determination of value for transactions between the Related parties under GST Laws.
 Higher collections can offset GST losses
 GST to subsume over a dozen Central, State taxes
 Incidence of indirect taxes won't go up under GST

Service tax is payable on flats allotted to the landowner, clarifies Finance Ministry
February, 16th 2012

When the landowner is given flats in lieu of cash, such flats become liable to service tax, says the Finance Ministry's clarification of February 10, among other things.

Suppose, the landowner invites a builder to demolish his bungalow and construct 10 flats thereon, with two flats being allotted to him as sale consideration, the two flats, though for non-cash consideration, would attract service tax immediately on signing of the building agreement.

The taxable value would the amount for which similar flats have been booked by the other buyers on the date of such agreement.

It boils down to this: if on the date of the agreement with the builder, there are two buyers who have booked their flats that are similar to those allotted to the landowner at Rs 40 lakh each, the allotment of the two flats to the landowner would be a taxable event, liable to service tax.

With abatement allowed being 75 per cent towards the goods used in the construction, which obviously cannot be subjected to service tax, Rs 10 lakh would be liable to service tax, which currently is 10.3 per cent.


If the flats are not comparable on account of difference in the area, the rate per square foot charged from buyers must be taken into account.

And, if on the date of the agreement, other buyers paying cash have not stepped into the scene, the basis for valuation of flats allotted to the landowner would be the earliest such booking.

While the remaining eight flats may escape service tax if the buyers pay for them after the completion of construction' certificate is obtained, in view of the fact that no payment was made while the work was in progress or before the commencement of the work, the two flats allotted to the landowner will necessarily suffer service tax because, on the date of signing of the building agreement the non-cash consideration would be deemed to have been paid.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Outsourcing Company Offshore Software Outsourcing Software Outsourcing Company India Offshore Outsourcing Company India Software BPO Software Business Process Outsourcing Software Outsourcing India Offsho

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