Real estate agent service classification sustains partial pre-deposit waiver in service tax dispute

The tribunal examined whether the applicant's land transactions were a purchase-and-resale arrangement or taxable real estate agent service under service tax law. It noted that the applicant had not obtained a registered transfer of the land in its own favour before contracting with the builder, and the Revenue treated the activity as facilitation of a real estate transaction within the statutory definition of real estate agent. On that basis, complete waiver of pre-deposit was declined. Partial waiver was granted subject to deposit of Rs. 30,00,000, with the balance of service tax and interest waived on compliance.

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Issues: Whether the applicant was entitled to total waiver of pre-deposit in a service tax demand based on the allegation that it rendered real estate agent service.

Analysis: The applicant claimed that it entered into agreements to purchase land and thereafter entered into an agreement for sale of the same land to a builder, contending that the activity was a purchase and resale transaction and not a taxable agency service. The Revenue relied on the statutory definition of real estate agent under the service tax law and maintained that the applicant merely facilitated the transaction without taking conveyance of the land in its own name. On the materials available, the applicant had not obtained a registered transfer of the land in its own favour before contracting with the builder, and the activity was treated as rendering of service in relation to real estate transactions.

Conclusion: The applicant was not entitled to complete waiver of pre-deposit. Partial waiver was granted on deposit of Rs. 30,00,000, and the balance of service tax and interest was waived upon compliance.

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