AMP Universal Realty Pvt. Ltd. Vs Commissioner of Service Tax Audit (CESTAT Kolkata)
Sub: Whether Long term lease premium, car parking charges, are liable for service tax under the head Renting of immovable property and connected issues.
Beneficial judgement for real estate players who have declared lease hold transfer of property under the head construction service.
The Hon’ble Division bench of CESTAT Kolkata was considering the levy of service tax in respect of AMP Vaishakhi Mall which was constructed in Kolkata and which was interalia transferred by way of long term lease and service tax on such transfer was levied on the pretext that it was renting of immovable property service as there was no sale of immovable property in the opinion of Revenue.
The Ld members however correctly analysed the service by observing that one time premium by way of salami was not rent and property rights, title and possession having been transferred by way of long term lease was nothing but construction service and was eligible for abatement also relying upon catena of judicial decisions in this regard across the CESTATs in country.
Moreover, the connected issue regarding car parking charges was also held not to be taxable under the head Renting of immovable property services. Another important issue which was decided was related to the service tax which was discharged on the sundry debtors on receipts basis as against the rules which provided for discharge of services tax on raising of invoices. The members directed the interest to be paid for deferment of tax on such sundry debtors.
