Is Selling/transferring lease land taxable?

[Yatin Bhopi]

Dear experts,

Weather selling / transferring lease land taxable under service tax law? If it is taxable what will be taxable value? Is it on selling/transfer price?

[Madhukar N Hiregange]

The definition of services excludes transfer of immovable property. The benefits arising from land also MAYBE said to be connected to Imm Property.

Both selling / transfer of lease land may not be liable under ST.

[Yatin Bhopi]

Sir

Thanks for your immediate replay.But I would like to redraft my query

We are holding lease land (lease agreement between us and XYZ. We are in the process to transfer this lease land to other party (ABC).

After the transaction our agreement between XYZ will come to end and new arrangement will come into force between XYZ and other party (ABC).

Since in this transaction we are not selling the land since we are not the owner of the land. Whether this transaction will attract service tax or not?

Please guide us

[PAWAN KUMAR]

Dear Sir,

As per my view, it is a case of transfer of title in immovable property as per clause (44) (a) of section 65B, hence not liable for service tax at all as the same is out of purview of service.

[YAGAY andSUN]

Dear Yatin,

No service tax would be applicable on such transactions, however, Stamp Duty and Municipal Tax would be payable on sale/transfer of land.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

Transfer of immovable property excluded from service tax; leasehold transfers not taxable, but stamp and municipal duties may apply. Transfers of leasehold land that effect a transfer of title or the benefits and rights in immovable property are excluded from service tax under the statutory exclusion for transfer of immovable property; however, stamp duty and municipal taxes may remain payable on such transactions.