TaxTMI Updates e-Newsletter
May 01,2012

Summary: The definition of goods for service tax adopts the Sale of Goods Act formulation but replaces 'stocks and shares' with 'securities', widening coverage. Pure transfers of title in securities on a principal to principal basis are not services; non title arrangements (forbearance of rights, similar contractual restraints) can remain services. The decisive test is commercial marketability and the capacity for abstraction, transfer, delivery, storage and possession; only items meeting that marketability test qualify as goods.

Summary: A transfer of a business undertaking or business qualifies as a slump sale when made for a lump sum consideration without assigning values to individual assets and liabilities; the wide statutory definition of transfer includes transfers under a court sanctioned scheme of arrangement, so such scheme based transfers can attract the tax provision governing slump sales if the statutory conditions are satisfied. Factual variations like non transfer of certain assets or later allocation of asset values determine applicability.