The Bangalore Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) in the case of Prestige Estates Projects Pvt. Ltd. v. Commissioner of Central Tax held that no service tax can be levied where activities of ‘assignment transfer income’, ‘assessment and bifurcation fees’, ‘Khata transfer fees’ and ‘forfeiture’ undertaken by them during the course of construction and sale of apartments as real estate developers.
The appellant in the present case is real estate developers engaged in rendering services of development of residential and commercial buildings and also render real estate services.
The issue before the present Tribunal was the determination of the Service Tax liability of the appellant for the provision of services of ‘Consultancy in real estate services, managing projects, assignment and transfer income, assessment and bifurcation fees, forfeiture of amounts received’ within the ambit of definition of ‘Real Estate Services’ vis-à-vis ‘construction of residential and complex services’.
After perusing the arguments of both the parties, the Tribunal bench comprising of Judicial Member S.S. Garg and Technical Member P. Anjani Kumar was of the view that the appellant failed to contest the levy of Service Tax in respect of consultancy in real estate services. Agreeing with the contention made by the appellant and basing the pronouncement on the law laid down by Tribunals of different states it held that the activities of ‘assignment transfer income’, ‘assessment and bifurcation fees’, ‘Khata transfer fees’ and ‘forfeiture’ undertaken by them is not in the capacity of a real estate agent but undertaken as real estate developers.
Furthermore, with respect to the issue on charging ‘Service Tax’ on ‘Management of Construction of Projects’, the tribunal held that the appellant’s role was to supervise the construction upon failure of which would not render it mere advice ‘consultancy or technical assistance’ in respect of the management of real estate’. Hence, the Tribunal held that no Service Tax can be demanded from the appellants under the head of ‘Real Estate Agent Service’ during the relevant period.
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