Can the ST Department say that tax should be paid by the builder for the value of construction in respect of which no consideration has been received?
It should be noted that, in such cases, the builder recovers his cost from the additional space being made available. He has to pay ST on sale of this additional floor space. Consideration so received is subject to ST. Therefore, the question of paying the ST second time on the value of services rendered to the existing owner does not arise. It should also be remembered that there is consideration for the value of services by the builder. Only thing is that it is moving from the new buyer and not from the existing owners. Since, the liability of ST is attached to SP, it is immaterial whether the tax is borne by the new owners or others.
Related Questions
- In the eventuality of the builder having collected the tax but not paying to the government or being unable to pay, whether the ST Department can recover the same from the buyer of flat?
- Department had clarified that agreement with builder/developer for an individual flat will not be subject to service tax. Is that clarification still valid?
- Amount paid by the prospective buyer will be an additional burden. How to ensure that the builder has paid the amount of ST collected?
