Service tax on commercial property

[Guest]

I have purchased an commercial property  for the period 2008-09 at Ahmadabad. Recently the seller asking me to pay service tax on above property purchased.  

Kindly let me know that the service tax is applicable on this or not?

 

Thanks in Advance....

[Shyam .]

Hi,

No, you don’t need to pay service tax. Service tax provision doesn’t covered the transfer of title in immovable property.

Thanks,

Shyam

As per Section 65 B (44), A transfer of title in immovable property does not include in meaning of service.

[Guest]

thanks for your reply...

but  i have one more  doubt  what is definition of 'service' under Section 65 B (44)for the period 2008-09 because I have purchased commercial property  for the period 2008-09.

 

[Shyam .]

Hi,

Section 65 B (44) does not exist in year 2008-09. The  term "Service" has been defined for the first time in finance act 2012. 

Thanks,

Shyam

[Pratik Bhansali]

Hi Varsha,

I agree to Mr Shyam. However can you please clarify the property which you purchased was a under construction property ? If Yes .. when was the construction completed ?

 

Pratik

 

[Guest]

Sir,

I purchased a warehouse at Gandhidham  for the year 2008-09 and this was not a under construction property. I purchased fully constructed warehouse by sale Agreement entered into buyer & seller.

Thanks...

 

[Guest]

 

Please note the word Ahmadabad instead of Gandhidham.

AI Summary

Transfer of title in immovable property not a taxable service; sale of completed commercial property not subject to service tax. A transfer of title in immovable property is not treated as a service for service tax purposes, and although the statutory definition of 'service' was introduced later, the practical consequence is that the outright sale of a fully constructed commercial warehouse acquired by sale agreement is not subject to service tax; by contrast, transfers involving under-construction properties may present different tax considerations.