2007 (5) TMI 12 - AT - Service Tax

Real Estate Agent Services Alleged that appellant is providing the services of RSA Services and liable to pay service tax Held the allegation right and interest and penalty sustained

Summary

Issues:
1. Challenge to the order of Commissioner (Appeals) regarding services rendered by the appellant being classified as that of a real estate agent.
2. Interpretation of the definition of 'real estate agent' and 'real estate consultant' under Section 65(73) and 65(74) of the Finance Act, 1994.
3. Analysis of the agreement between the appellant and M/s. JVD Builders Pvt. Ltd. to determine the nature of services provided.

Issue 1:
The appellant contested the order of Commissioner (Appeals) that classified their services as those of a real estate agent. The Assistant Commissioner found that the appellant's activities fell within the ambit of the Service Tax Act, 1994, specifically under the category of a real estate agent. The appellant procured orders for construction of houses and received payment for these services, making them liable for service tax. The failure to pay service tax and comply with registration and return submission requirements attracted penal provisions.

Issue 2:
The definitions of 'real estate agent' and 'real estate consultant' under Section 65(73) and 65(74) of the Finance Act, 1994 were crucial in determining the appellant's classification. A real estate agent is defined as a person engaged in services related to real estate transactions, including a real estate consultant. The appellant argued that to be classified as a real estate agent, one must be engaged in services related to sale, purchase, leasing, or renting of real estate and must also be a real estate consultant.

Issue 3:
The agreement between the appellant and M/s. JVD Builders Pvt. Ltd. played a significant role in establishing the nature of services provided. The agreement outlined the appellant's role in procuring orders for construction projects and facilitating payments from the government. The appellant was to receive a commission for these services. The Tribunal found that based on the agreement and the services rendered, the appellant operated as a real estate agent, including functions of a real estate consultant. Consequently, the Tribunal upheld the lower authorities' decision, dismissing the appeal.

In conclusion, the Tribunal affirmed that the appellant's activities aligned with the definition of a real estate agent as per the Service Tax Act, 1994. The judgment highlighted the importance of understanding the definitions of 'real estate agent' and 'real estate consultant' in determining the tax liability for services related to real estate transactions. The decision was based on a thorough analysis of the appellant's actions and the agreement with M/s. JVD Builders Pvt. Ltd., ultimately leading to the dismissal of the appeal.