9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 429 - AT - Service TaxLevy of Service Tax alongwith interest and penalty - Construction of Residential Complex service - tax on the value of undivided share by the land owners - invocation of extended period of limitation. The total land used for the development is taken into consideration and the Department has calculated land owner share, applying the percentage of constructed area in terms of the Agreement. HELD THAT - The issue is no longer res integra as clarified by the Board Circular No. 108/2009, read with Circular No. 151/2012, wherein, in view of the amendment brought in the definition of Construction of Residential Complex service , whereby explanation was inserted w.e.f. 01.07.2010, and builders were first time brought into the ambit of service tax. Further, it was clarified by the aforementioned Circulars, in view of the Finance Act, 2010 that builder/ developer of residential complex, is not liable to pay service tax for the period prior to 01.07.2010. The impugned order set aside - appeal allowed - decided in favour of appellant.
Issues involved:
The issue involved in this Appeal is whether demand of service tax under the head "Construction of Residential Complex service" as defined in Sec 65(105)(zzzh) of the Finance Act has been rightly confirmed along with penalty. Comprehensive details of the judgment for each issue involved: 1. Background: The Appellant, a developer, entered into Joint Development Agreements for the construction of residential complexes. The Department proposed to levy service tax on the value of undivided share by the land owners based on the constructed area in terms of the Agreement. 2. Contentions: The Appellant objected to the service tax proposal citing reasons such as no service provider-service recipient relationship in joint Development Agreements, consideration for land being the constructed area, and absence of liability as per Circular No. 108/2009. 3. Department's Decision: The Department confirmed the service tax demand, interest, and penalty, relying on the ruling of the Hon'ble Supreme Court in Faqir Chand Gulati vs Uppal Agencies Pvt Ltd. The Commissioner (Appeals) upheld this decision, stating the land owner is the consumer and the developer is the service provider. 4. Appellant's Arguments: The Appellant argued that there is no service provider-service-recipient relationship in the present case, as the parties jointly developed the land. Referring to Circular No. 108/2009 and Circular No. 151/2012, it was contended that developers were not liable to pay service tax before 01.07.2010. 5. Case Precedents: The Appellant cited various rulings to support their case, emphasizing that demand under 'Construction of Complex services' was not tenable in similar cases. 6. Decision: The Tribunal noted that builders were first brought into the ambit of service tax by the Finance Act, 2010, with an explanation inserted w.e.f. 01.07.2010. Considering the Board Circulars, it was clarified that builders were not liable to pay service tax before this date. Therefore, the Appeal was allowed, and the Impugned Order was set aside. This summary provides a detailed overview of the legal judgment, highlighting the key issues, arguments presented, decisions made, and relevant legal precedents cited during the proceedings.
|
