Pre-deposit - Prima Facie, the value of flats allotted to the land owner by the assessee-builder to be determined based on the gross amount charged by the service provider to provide similar service to any other person- Rule 3 of Valuation Rules is applicable

Southern Properties & Promoters v/s Commissioner of Central Excise, (Service Tax) Coimbatore. [2015] 54 taxmann.com 116 (Chennai -CESTAT)

 

Pre-deposit - Prima Facie, the value of flats allotted to the land owner by the assessee-builder to be determined based on the gross amount charged by the   service provider to provide similar service to any other person- Rule 3 of Valuation Rules is applicable.

FACTS:

The applicant provided taxable service under the category of "Construction of Residential   Complex   Service".   It entered into joint venture with land owner for construction of 72 flats out of which 48 flats belonged to assessee and service  tax was paid on consideration  received  thereon and  24  flats  belonged  to  land  owner and no service tax was paid thereon. A show cause notice was issued proposing service tax on the 24 flats of the land owner's share on the ground that they failed to pay service tax for the taxable service provided by them to the land owners for construction of 24 flats in consideration of land value. The  applicant  submitted   that  the  consideration   is  the value of the land and hence it is liable to pay tax only on the land value  and  not on the value  determined  as per Rule'3(A)  of (Determination  of Value) Rules, 2006.