Service tax applicability
hkbabber
(Querist) 22 February 2016
This query is : Resolved
Service tax applicability in case where project is complete.Apply for approval for completion with competent authority.
Approval is deemed to granted as per law.
50% of Flats are sold & 50% appox. un sold.
Physical possession is hens over to 75% customers those purchase the flats from builder 7 other are paying their installments as per their agreement.
What will the status of un sold flats. Is service tax will applicable or not.
Thanks
hkbabber
S R agrawal
(Expert) 23 February 2016
It appears from the details furnished that the quarry relates to construction of residential complex.
As per the decisions and law, if the flats are sold to prospective buyers before getting Completion certificates from Competent authority, it is deemed to be service. Such Service is declared Service under section 66 E of the Finance Act, 1994 and the Service Tax is applicable in such cases. If the Flats are not booked before Completion Certificate from Competent authority, and are sold only thereafter, it would be Sale of Immovable property and will not be liable to Service tax as it would be excluded from Definition of service defined under Section 65 B (44) ibid.
