9911796707
TMI Blog2024 (6) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to pay service tax for the construction of residential complexes. The Board s circular has been considered by the Tribunal in the case of Krishna Homes Vs CCE [ 2014 (3) TMI 694 - CESTAT AHMEDABAD] wherein it has been held that the demand cannot sustain. The Tribunal in the case of vide Final Order [ 2024 (5) TMI 1197 - CESTAT CHENNAI] had occasion recently to consider a similar issue and set aside the demand holding that the promoter / builder / developer is not required to pay service tax prior to 1.7.2010. The Tribunal had also referred to the Explanation added to Section 65 (105) (zzzh) which was introduced w.e.f. 1.7.2010 which stated that the builder / promoter / developer is not liable to pay service tax for construction of resi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal authority confirmed the demand, interest and imposed penalties. Aggrieved by such order, the appellant is now before the Tribunal. 2. The Ld. Consultant Shri V. Vijay Anand appeared and argued for the appellant. It is submitted that the appellant is a promoter / developer / builder and is engaged in construction of residential complexes. For this, the appellant after identifying the land and land owner, arranges registration of undivided share of the land for each of the prospective buyer. They entered into separate agreements with prospective flat buyers for construction of flat in the complex and provided for construction on linked payments. After the flats are constructed, the same is handed over to the buyer without any sale deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residential complexes is sustainable or not. 7. The Board vide its Circular No.108/2/2009-ST dt. 29.01.2009 has clarified that the promoter / builder / developer is not required to pay service tax for the construction of residential complexes. The Board s circular has been considered by the Tribunal in the case of Krishna Homes Vs CCE (supra) wherein it has been held that the demand cannot sustain. The relevant para of the decision reads as under : 8. Coming first to the question as to whether the activity of M/s. Krishna Homes and M/s. Raj Homes was taxable during the period of dispute or not, by Finance Act, 2005, Clause (zzzh) was introduced into Section 65(105) of Finance Act, 1994, so as to bring within the purview of the term taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the complex constructed by both the assessees in these appeals are covered by the definition of residential complex as given in Section 65(91a). There is also no dispute that both the assessees had engaged contractors for construction of the complexes. The dispute in these appeals is as to whether the assessees would be liable to pay Service Tax on the amounts charged by them from their customers with whom they had entered into agreements for construction of the residential units and whose possession was to be handed over on completion of the construction and full payment having been made by the customers. It is seen that on this point, the Tax Research Unit of the Central Board of Excise Customs, which is a wing of the C.B.E. C. deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be service provided by the builder to the buyer. Thus, in terms of this explanation, when a builder/promoter/developer got a residential complex constructed for his customers with whom he had individually entered into agreements, in terms of which the prospective customers were required to make payments for the residential units to be constructed in instalments and the possession of the residential units was to be given to the customers on completion of the complex and full payment having been made, the builder/promoter/developer was to be treated as a deemed provider of construction of residential complex service to his customers. Thus, by this explanation, the scope of the Clause (zzzh) of Section 65(105) has been expanded and this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arificatory of the same; and is consequently prospective . 8. The Tribunal in the case of vide Final Order No.40539/2024 dt. 10.05.2024 had occasion recently to consider a similar issue and set aside the demand holding that the promoter / builder / developer is not required to pay service tax prior to 1.7.2010. The Tribunal had also referred to the Explanation added to Section 65 (105) (zzzh) which was introduced w.e.f. 1.7.2010 which stated that the builder / promoter / developer is not liable to pay service tax for construction of residential complex for the period prior to 1.7.2010. Following the said decision, we are of the considered opinion that the demand of service tax cannot sustain. The impugned order is set aside. The appeal is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
