No service tax for title transfer in property

Mere title transfer in immovable property is exempt from service tax, the finance ministry clarified on Monday. In the case of sale of flats, title transfer after the issuance of an occupancy certificate is exempt from service tax.

The Central Board of Excise and Customs (CBEC) has given this clarification on a case related to areas under the jurisdiction of Brihanmumbai Municipal Corporation.

"To resolve a long-standing issue relating to levy of service tax on sale of flats or dwellings after issue of occupancy certificate but before issue of completion certificate… it has been conveyed… that such a sale where the entire consideration is received after issue of occupancy certificate… leading to a mere transfer of title in immovable property, falls outside the definition of 'service' provided in Section 65B (44) of the Finance Act, 1994, and is therefore, not taxable," CBEC said.