No service tax on transformation of plots said Central Excise Commissioner

Q: Good news for plot holders in ndustrial Area, Phase I, and Phase II, the Commissioner, Customs and Central Excise Department, has ruled that there will be not service tax on conversion of plots.

Vinu S,

12th February 2014

Real estate News in Chandigarh

property tax

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conversion of plots

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Replies (4)

What will be the estimate outcome of this decision taken by the concerned authority..
Maya Garden City Apartment

Maya Roa, Apartment Resident, Chandigarh

24th February 2014

Comment

I agree with kaushik Bardia.
Maya Estate
Chandigarh, Zirakpur

Maya Roa, Apartment Resident, Chandigarh

17th February 2014

Comment

Hi all,
When they get such notice what was the reaction of the plot owners against the UT Administration? What was mention on the notice?

Veena K,

12th February 2014

Comment

Hello Veena,
The plot owners challenged the notice and filed an appeal before the Commissioner, Customs and Central Excise Department.
The order reads: “Such activity is purely in public interest and it is undertaken as mandatory and statutory function. These are not in the nature of service to any particular individual for any consideration. Therefore, such an activity performed by a sovereign/public authority under the provisions of law does not constitute provision of taxable service to a person and, therefore, no service tax is leviable on such activities.”

Kaushik Bardia,

12th February 2014

Thanks kaushik,
Do you also have the information about the converted plot owners? What was the reaction of the converted plot owners when they heard the news?

Veena K,

12th February 2014

Well Veena,
I go through the newspaper and found that Chander Verma, chairman of the Converted Plot Owners’ Association, said the conversion of plots was not a service and they had submitted the same point before the Commissioner. “We hail the order and also the efforts of the Estate Office officials to pursue the case before the Commissioner,”

Arvinder Pal Singh, president of the Hotel and Restaurant Association, Chandigarh, has also welcomed the order.

Kaushik Bardia,

12th February 2014

Hi,
Who will be benefitted through this order? When was the news declared and by whom?

Sujan Mitra,

12th February 2014

Comment

Hello Sujan,
This order will imply on those who have converted their plots from industrial to commercial.
In a relief to the converted plot holders in Industrial Area, Phase I, and Phase II by Central Excise Department on 6th February,2014.

Varun,

12th February 2014

Thanks Varun,
Do you haver any further infor mation regarding other benefit apart from no service tax on transformation of plots? What was the total amount that was to pay by Central Excise Commissioner? Who is going to pay the rest of the amount?

Sujan Mitra,

12th February 2014

Yes! Varun,
Apart from that the Commissioner has also renounce the payment Rs 24.34 crore as service tax which was Rs. 34.31 crore earlier but the Estate Office will now have to pay Rs 9.97 crore as service tax for ground rent, tower fee and rent income.

Varun,

12th February 2014

Tell me what happened after receving the notice what was the reaction of UT Estate Office?

Sujan Mitra,

12th February 2014

Well Sujan,
After receiving the notice, the UT Estate Office had asked the plot owners to pay service tax or face cancellation of allotment of their properties in September 2013.

Varun,

12th February 2014