2019 (3) TMI 671 - AT - Service Tax

Real Estate Agent Service - Transfer charges for transfer the allotment of property in the name of the assignee - principal agent relationship or not - levy of service tax - Held that - The said issue has been examined by this Tribunal in detail in the case of Ansal Housing & Construction Ltd. Vs. CST, New Delhi 2017 (11) TMI 546 - CESTAT NEW DELHI , where it was held that To levy service tax first of all the provider of service should be a real estate agent and second while acting as such agent the person concerned should have provided service in relation to sale, purchase, leasing or renting of real estate. As these transfer charges have not collected by the assessee as Real Estate Agent, therefore, no service tax is payable by the assessee on the transfer charges - demand of service tax is not sustainable against the assessee - Appeal dismissed - decided against Revenue.

Summary

Issues:
Whether the assessee is liable to pay service tax under the category of 'Real Estate Agent Service' on transfer charges collected from allottee buyers for changing the name of the allottee in the records of the assessee?

Analysis:
The judgment involves appeals against impugned orders where the assessee, engaged in real estate development, charged transfer charges for changing the name of allottees in the records. The revenue contended that these charges are liable for service tax under 'Real Estate Agent Service.' The key issue was whether these transfer charges attract service tax under this category.

The Tribunal referred to previous cases for guidance. In the case of Ansal Housing & Construction Ltd. Vs. CST, it was held that the charges for changing the name of flat owners are not chargeable to service tax as the assessee acted on a principal-to-principal basis, not as a real estate agent. Similarly, in the case of Prestige Estates Projects Pvt. Ltd. Vs. Commissioner of Central Excise, it was ruled that transfer charges collected by the assessee, not as a real estate agent, do not attract service tax. The Tribunal emphasized that the charges were not collected in the capacity of a Real Estate Agent, leading to the conclusion that no service tax is payable on the transfer charges.

Based on the above analysis, the Tribunal allowed the stay application filed by the assessee and dismissed the appeal by the Revenue. The judgment highlighted that since the transfer charges were not collected as a Real Estate Agent, the demand for service tax against the assessee was deemed unsustainable. Consequently, the appeals were disposed of in favor of the assessee, affirming that no service tax is payable on the transfer charges in question.