Report of the High Level Committee; recommendation regarding valuation of flats for levy of Service Tax

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..... Central Excise (All) Principal Chief Commissioners of Central Excise Service Tax (All) Principal Director Generals of Goods and Service Tax/System/CEI Director General of Audit/Tax Payer Services, Principal Commissioners/ Commissioners of Customs and Central Excise (All) Principal Commissioners/Commissioners of Central Excise and Service Tax (All) Principal Commissioners/Commis .....

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..... o views need to be reconciled. The HLC has opined that the guidelines communicated by the said Circular are more appropriate. 2. The issue has been examined. In a tri-partite construction business model, there are 3 parties involved: i. The land owner; ii. The builder/developer; iii. The contractor (who undertakes the construction). Typically, in such a model, the land owner enter .....

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..... owner will be the value of the land when the same is transferred and the point of taxation will also be determined accordingly. However, Circular No. 151/2/2012-ST dated 10.2.2012 states that value of land / development rights in the land may not be ascertainable ordinarily and therefore, value, in the case of flats given to first category of service receiver, that is, the land owner, is determ .....

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..... he possession or right in the property of the said flats are transferred to the land owner by entering into a conveyance deed or similar instrument(e.g. allotment letter). 4. The Circular dated 10.2.2012 is in accordance with the provisions relating to valuation as laid down in the Finance Act, 1994 and the Service Tax (Determination of Value) Rules, 2006 . As regards the Education Guide, .....

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..... transfers his land/development rights to builder , for getting, in return, constructed flats/dwellings from builder/developer, the Service Tax assessing authorities should be guided by the said Board Circular dated 10.2.2012 and not the Education Guide. 6. All concerned are requested to acknowledge the receipt of this instruction. Yours faithfully, (Abhishek Verma) Technical Off .....

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