renting of vacant land

[NARASIMHAN SUBBARATHINAM]

A public undertaking is a developer of industrial estates by acquiring the land and develop industrial infrastructure and the land is allotted on a lease basis. The land cost is received upfront and the characcteristic of lease is retained only to maitain the purpose for which it was allotted. since the vacant land is leased for furtherence of the business, service tax is applicable and if so from which date?.

AI Summary

Service Tax Applicable on Leases Allowing Construction of Structures, Effective July 2010, Not Retroactive A public undertaking involved in developing industrial estates leases vacant land for business purposes, receiving the land cost upfront while maintaining the lease's purpose. A query was raised about the applicability of service tax on such leases. It was clarified that service tax applies if the lessee is allowed to construct permanent or temporary structures on the land. This amendment became effective from July 2010 and is not retroactive.