Green Avenue Homes & Gardens Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Quashes Service Tax Demand Because Individual Villas Are Not a Residential Complex; No Service Tax on Villa Projects Because Separate Plot Owners Engaged Builder Independently; Service Tax Demand Set Aside Because Villas Were Built Under Separate Approvals and Contracts; Gated Community Status Alone Not Enough for Service Tax on Villa Construction: CESTAT.
In Green Avenue Homes & Gardens Vs Commissioner of GST & Central Excise, the Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) examined whether the construction of villas in gated community projects with common amenities could be taxed as “construction of residential complex” under the Finance Act, 1994.
The appellant was engaged in constructing residential complexes, apartments, and villas. Following an investigation, the department alleged that between April 2009 and December 2012 the appellant developed eight villa projects, each containing more than 12 units and common facilities such as gated community amenities. The department classified the activity as “works contract service” covered under “construction of complex” and demanded service tax of over Rs. 4.04 crore along with interest and penalties. The adjudicating authority confirmed the demand, imposed an equal penalty under Section 78, and an additional penalty for non-filing of ST-3 returns. The appellant challenged the order before the Tribunal.
