SERVICE TAX ON CONVERSION PREMIUM

[abbas mukhi]

Dear Sir,

whether Conversion premium received on converting lease hold properties into free hold property is liable for Service Tax??

Thanks

AI Summary

Conversion Premium for Leasehold to Freehold Exempt from Service Tax Under Section 65 B(44) of Finance Act 1994 A forum participant inquired whether a conversion premium for changing leasehold properties to freehold is subject to Service Tax. Respondents clarified that such conversion is not considered a service under Section 65 B(44) of the Finance Act, 1994, and is thus exempt from Service Tax. One contributor mentioned a case in Chandigarh where a refund was sanctioned for Service Tax paid on conversion charges. Another participant asked about Service Tax on royalties for using a US brand name, and it was explained that such royalties fall under 'Intellectual Property Services' and are subject to tax under the Reverse Charge Mechanism.