Firstpost
  • Home
  • Video Shows
    Vantage Firstpost America Firstpost Africa First Sports
  • World
    US News
  • Explainers
  • News
    India Opinion Cricket Tech Entertainment Sports Health Photostories
  • Asia Cup 2025
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
Trending:
  • Charlie Kirk shot dead
  • Nepal protests
  • Russia-Poland tension
  • Israeli strikes in Qatar
  • Larry Ellison
  • Apple event
  • Sunjay Kapur inheritance row
fp-logo
No service tax on purchase of under-construction flats: Delhi HC
Whatsapp Facebook Twitter
Whatsapp Facebook Twitter
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
  • Home
  • Investing
  • No service tax on purchase of under-construction flats: Delhi HC

No service tax on purchase of under-construction flats: Delhi HC

Partnered • June 23, 2016, 16:51:36 IST
Whatsapp Facebook Twitter

The Delhi High Court has ruled that no service tax can be levied, in respect of the agreements entered into between buyers and builders for flats in an under-construction building in a housing project. A bench of justices S Muralidhar and Vibhu Bakhru, however, noted that service tax could be levied on the amount charged by the builders, for preferential location of the flat, saying that it was based on the preferences of customers and amounted to value addition.

Advertisement
Subscribe Join Us
Add as a preferred source on Google
Prefer
Firstpost
On
Google
No service tax on purchase of under-construction flats: Delhi HC

The Delhi High Court has ruled that no service tax can be levied, in respect of the agreements entered into between buyers and builders for flats in an under-construction building in a housing project. A bench of justices S Muralidhar and Vibhu Bakhru, however, noted that service tax could be levied on the amount charged by the builders, for preferential location of the flat, saying that it was based on the preferences of customers and amounted to value addition.

NoTax825X350

The order came on petitions filed by several persons who had entered into separate agreements with M/s Sethi Buildwell Pvt Ltd, to buy flats in a multi-storeyed group housing project developed by the builder in sector 76 in Noida in Uttar Pradesh. The petitioners had moved the court against the levy of service tax on services in relation to construction of the complex, as defined under the Finance Act 1994, as well as the levy of service tax on preferential location charges (PLC).

Refund, with interest

The bench said that the government shall examine, whether the builder, in this case, has collected any service tax from the petitioners and if such amount has been deposited with it, the money shall be refunded to them with 6% interest. “We accept the petitioners contention that no service tax under section 66 of the Act, read with section 65 (105)(zzzh) of the Act, could be charged in respect of composite contracts, such as the ones entered into by the petitioners with the builder,” the bench said. “The impugned explanation (inserted by virtue of Finance Act 2010), to the extent that it seeks to include composite contracts for purchase of units in a complex within the scope of taxable service, is set aside,” it said.

Service tax on PLC to remain

Regarding service tax levied on preferential location, the bench said, “We do not find any merit in the contention that there is no element of service involved, in the preferential location charges levied by a builder. We are unable to accept that such charges, relate solely to the location of land. Thus, preferential location charges are charged by the builder, based on the preferences of its customers. They are in one sense, a measure of additional value that a customer derives from acquiring a particular unit.” The bench noted that service tax cannot be levied on the value of undivided share of land acquired by a buyer of a dwelling unit, or on the value of goods which were incorporated in the project by a developer. It also said there was no ‘machinery provision’ to ascertain the service element involved in the composite contract. PTI

Tags
realty Sponsored PropertyParadise PropertyParadiseFeatures
End of Article
Latest News
Find us on YouTube
Subscribe
End of Article

Top Stories

Charlie Kirk, shot dead in Utah, once said gun deaths are 'worth it' to save Second Amendment

Charlie Kirk, shot dead in Utah, once said gun deaths are 'worth it' to save Second Amendment

From governance to tourism, how Gen-Z protests have damaged Nepal

From governance to tourism, how Gen-Z protests have damaged Nepal

Did Russia deliberately send drones into Poland’s airspace?

Did Russia deliberately send drones into Poland’s airspace?

Netanyahu ‘killed any hope’ for Israeli hostages: Qatar PM after Doha strike

Netanyahu ‘killed any hope’ for Israeli hostages: Qatar PM after Doha strike

Charlie Kirk, shot dead in Utah, once said gun deaths are 'worth it' to save Second Amendment

Charlie Kirk, shot dead in Utah, once said gun deaths are 'worth it' to save Second Amendment

From governance to tourism, how Gen-Z protests have damaged Nepal

From governance to tourism, how Gen-Z protests have damaged Nepal

Did Russia deliberately send drones into Poland’s airspace?

Did Russia deliberately send drones into Poland’s airspace?

Netanyahu ‘killed any hope’ for Israeli hostages: Qatar PM after Doha strike

Netanyahu ‘killed any hope’ for Israeli hostages: Qatar PM after Doha strike

Top Shows

Vantage Firstpost America Firstpost Africa First Sports
Latest News About Firstpost
Most Searched Categories
  • Web Stories
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Tech/Auto
  • Entertainment
  • IPL 2025
NETWORK18 SITES
  • News18
  • Money Control
  • CNBC TV18
  • Forbes India
  • Advertise with us
  • Sitemap
Firstpost Logo

is on YouTube

Subscribe Now

Copyright @ 2024. Firstpost - All Rights Reserved

About Us Contact Us Privacy Policy Cookie Policy Terms Of Use
Home Video Shorts Live TV