TaxTMI 
TaxTMI 
We have received consideration from landlord for surrender of tenancy Rights. Whether service Tax is applicable on this amount under section 66E?
Service Tax applicability of surrender of Tenancy Rights
17 Dec 2015 
6 Replies 
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Service tax on surrender of tenancy rights: treatment hinges on whether surrender is an agreement to refrain, attracting declared service.
Whether consideration for surrendering tenancy rights is taxable under Section 66E(e) as a declared service: advisers say yes, viewing surrender as agreeing to refrain from exercising or transferring tenancy rights and thus falling within the statutory description; the querent argues it is a sale-like transfer (capital gains paid) and not a service, while others maintain that giving up the right to enjoy or reassign tenancy fits the definition and attracts service tax. (AI Summary)
Whether consideration for surrendering tenancy rights is taxable under Section 66E(e) as a declared service: advisers say yes, viewing surrender as agreeing to refrain from exercising or transferring tenancy rights and thus falling within the statutory description; the querent argues it is a sale-like transfer (capital gains paid) and not a service, while others maintain that giving up the right to enjoy or reassign tenancy fits the definition and attracts service tax. (AI Summary)