2026-VIL-959-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Construction of individual villas with common amenities in a gated community layout - Revenue sought to levy service tax treating the activity as construction of a residential complex service - Whether construction of individual villas situated in a larger layout having common amenities and a common project identity, where each villa had separate plot identification, individual approvals and separate construction agreements with individual buyers, constitutes construction of a residential complex attracting service tax liability under Section 65(105)(zzzza) read with Section 65(91a) of the Finance Act, 1994 – HELD - The definition of residential complex under Section 65(91a) requires that a complex comprise a building or buildings having more than twelve residential units together with common area and specified facilities. The statute contemplates a residential complex as a unified project conceived and executed under a single composite construction agreement - In the present case, the foundational requirement of a single unified complex is absent as each purchaser obtained separate plan approval in their own name and entered into individual construction arrangements with the developer for construction of their respective villa. A common project name, common layout approval and the provision of common amenities are matters of commercial description and features of organized housing layouts but do not by themselves convert independent villas into a residential complex. The circumstance that individual villas form part of a gated community with shared facilities does not displace the foundational facts that plots stood identified separately, approvals were obtained individually and construction was contracted for separately by each buyer. The statutory definition cannot be expanded by inference merely because the development was marketed as a gated community - The principle established in Macro Marvel Projects Ltd. affirmed by the Apex Court and consistently applied by coordinate benches of the tribunal provides that construction of individual residential units does not amount to construction of a residential complex - The impugned order is set aside and the appeal is allowed
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