Assuming that the existing owners do not get any additional floor space in the new building but are required to pay some amount to the builder, whether it can be subject to ST?
Looking to the wordings of the Explanation, it appears that it will not be taxable. Following points be noted here. Firstly, the builder is providing service to the existing owners. Secondly, the buyer is not a prospective one as he is already an owner of the flat. A question that may arise is whether such services can be taxable under the main clause if not under the Explanation. Yes, it can be. It should be remembered that Explanation under zzzh and zzq does not exclude operation of the main clause. Therefore, if Explanation is not applicable for any reasons, provisions of the main clause will continue to apply.
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