Damages to tenant

[Asked by Guest]

Dear experts,

I am a property owner and i had given my property to some individual fr their business purposes but due to some reason i requested to him for vacant my property and he wants Rs. 1 crorre as compensation. And i have heard about service tax on 

5.7 Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act

In terms of this entry the following activities if carried out by a person for another for consideration would be treated as provision of service.

•  Agreeing to the obligation to refrain from an act.
•  Agreeing to the obligation to tolerate an act or a situation.
•  Agreeing to the obligation to do an act.

 Then is my act covered under service tax purview?

AI Summary

Agreement to refrain or tolerate an act may attract service tax where the settlement payment constitutes consideration for a service.
Whether a payment made in settlement of a lease dispute is taxable depends on whether it constitutes consideration for a service under the entry covering agreements to refrain from, tolerate, or do an act; settlement sums are not per se consideration unless they represent part of the consideration for an activity carried out, so liability depends on the factual characterisation of the payment.