REALTORS SET FREE OF SERVICE TAX BURDEN ON SALE OF APARTMENTS

The Central Board of Excise and Customs (CBEC) in a circular has said that construction service provided by a builder to a person buying the apartment till the execution of sale deed would not attract service tax. Therefore, any service provided by such seller in connection with the construction of residential complex till the execution of such sale deed would be in the nature of 'self-service' and consequently will not attract service tax, Also, if the ultimate owner enters into a contract for construction of a residential complex with a builder who himself provides service of design, planning and construction, and after such construction the owner receives such property for his personal use,
then such activity would not be subjected to service tax. It is because this case would fall under the exclusion provided in the definition of 'residential complex'. However, if services of any person like
contractor, designer or a similar service provider are received in both the cases, then these would attract service tax.