Sale of immovable property outside scope of service tax: SC

The Supreme Court on Tuesday ruled that the sale of immovable property, by itself, did not amount to a “service” under the Finance Act, 1994, and was therefore outside the scope of service tax, a verdict which experts believe not only seeks to preserve the federal balance but also shields genuine land-sale transactions from service-tax exposure.

- BHAVINI MISHRA

A Bench of justices JB Pardiwala and Sandeep Mehta delivered the ruling while dismissing an appeal filed by the Commissioner of Service Tax, New Delhi, against M/s Elegant Developers, a Prayagraj-based partnership firm.

The revenue department had contested a 2019 order of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), which had quashed a tax demand exceeding ₹10 crore.

The department had claimed that Elegant Developers had rendered taxable “real estate agent” services to Sahara India Commercial Corporation Ltd (SICCL) in connection with the purchase and development of land in several states.