Service Tax – Construction service – Constitutional Validity of FA 2010 Amendment Challenged – Interim relief
AS you will recall, the Finance Act 2010 added this explanation to Section 65(105)(zzzh)
"Explanation. - For the purposes of this sub-clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorised by the builder before the grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer;"
and the TRU clarified this to mean as , that unless the entire consideration for the property is paid after the completion of construction (i.e. after issuance of completion certificate by the competent authority), the activity of construction would be deemed to be a taxable service provided by the builder/promoter/developer to the prospective buyer and the service tax would be charged accordingly.
This had been challenged and the Bombay High Court had already granted an interim relief –
Now the Madras High Court has also given an interim relief to the party – please see