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2019 (10) TMI 171 - AT - Service TaxWorks contract service - construction of residential complex service or nor - demand of service tax on row houses which they have constructed and sold to individuals under the project name “Nilgiri Homes” - HELD THAT:- The appellant has taken a piece of land and developed that into a complex of individual residential units in the form of row houses with some common areas for parking, roads, etc. We have also seen the photographs produced by the appellant. These clearly indicate that they are row houses with some common boundaries along with roads and other facilities. Residential complex or otherwise? - HELD THAT:- The only logical understanding of the residential complex is that there should be 12 or more residential units either in the form of flats or as single houses in the entire complex. Evidently, in this particular case, the complex comprises of row houses as a gated community along with some common facilities and has more than 12 residential units. For this reason, we find that the project “Nilgiri Homes” qualifies as residential complex. It is not in dispute that the services were rendered in the form of works contract and therefore are chargeable to service tax in the works contract service. Nature of the contract on which service tax is proposed to be charged - HELD THAT:- The explanation to section 65(91a) categorically states that personal use includes permitting the complex for use as residence by another person on rent or without consideration. Therefore, it does not matter whether the individual buyer uses the flat himself or rents it out. There is nothing on record to establish that the individual buyers do not fall under the aforesaid explanation - thus no service tax is chargeable from the appellant on the agreements entered into by them with individual buyers for completion of their buildings as has been alleged in the SCN. Consequently, the demand needs to be set aside - Accordingly, the demands for interest and imposition of penalties also need to be set aside. Appeal allowed - decided in favor of appellant.
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