Service tax exempt on transfer of title of immovable property

The Finance Ministry on Monday said that in the case of sale of flats, the transfer of the title of immovable property after the issuance of an occupancy certificate is exempt from service tax.

“To resolve a long-standing issue relating to levy of service tax on sale of flats or dwellings after issue of occupancy certificate but before issue of completion certificate… it has been conveyed… that such a sale where the entire consideration is received after issue of occupancy certificate… leading to a mere transfer of title in immovable property, falls outside the definition of ‘service’ provided in Section 65B (44) of the Finance Act, 1994, and is therefore, not taxable,” said an official release.

The clarification by the Central Board of Excise and Customs was with regard to cases relating to areas under the jurisdiction of Municipal Corporation of Greater Mumbai or Brihanmumbai Municipal Corporation (BMC).

The Ministry said the view was conveyed to the service tax authorities in Mumbai on October 23.


The clarification by the Central Board of Excise and Customs was with regard to cases relating to areas under the jurisdiction of Municipal Corporation of Greater Mumbai.

Article sourced

 

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