service tax liability for land owners on sale of flats after receipt of completion certificate

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  1. T S Kumar

    T S Kumar New Member

    one my clients sold residential flats after obtaining the completion certificate from the competent authority . He has not received any advance before the execution of sale deed Is he liable for service tax on such sale ..... What is the legal provision of levy of service tax on entering into land development agreement in hands of builder .. is he liable for service tax on the value of built up area to be handed over to the land owner if so at what point of time and the rate of tax .... can he plead that his sale value of the residential flat to be sold to the customers includes the cost of flats value handed over to the land owner and no need to pay service tax on it
     
  2. SAI VARDHAN M

    SAI VARDHAN M New Member

    Residential flat sold to a buyer after obtaining the completion certificate from the competent authority and entire consideration is also received there after will be regarded as a sale and not as a service.
    Reason is as follows -

    The moment you get the completion certificate residential flat will become immovable property, sale of immovable property is not covered under service tax.
    In the given case as the entire consideration from the buyer is received only after obtaining the completion certificate from competent authority and no advance was received in this regard before obtaining the same, service tax can not be levied.

    Sai vardhan M
     
    Last edited: Apr 16, 2015
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