Real Estate India: Who if anyone is liable for Service tax under construction of complex service?

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Question asked by Chetan from Dallas, Texas:

Whether Service tax is liable under construction of complex service [section 65(zzzh)] on builder, promoter, developer or any such person—

(a) Who gets the complex built by engaging the service of a separate contractor, and
(b) Who builds the residential complex on his own by employing direct labour?

Vatsala Answers:

Clarification

a) In a case where the builder, promoter, developer or any such person builds a residential complex, having more than 12 residential units, by engaging a contractor for construction of the said residential complex, the contractor in his capacity as a taxable service provider (to the builder/Promoter/developer/any such person) shall be liable to pay Service tax on the gross amount charged for the construction services under construction of complex service [Section 65(105)(zzzh)

b) If no other person is engaged for construction work and the builder/promoter/developer/any such person undertakes construction works on his own with out engaging the services of any other person, then in such cases,-
• Service provider & service recipient relation ship does not exist.
• Service provided is in the nature of self-supply of services.


Hence, in the absence of service provider & service recipient relation ship & the service provided are in the nature of self-supply of services, the question of providing taxable service to any person by another person does not arise.

For more information, kindly visit at Real Estate India or Online Real Estate Video.

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