01 December 2012
One of my client was renting out property and was collecting the service tax. Now that property is sold out. Advocate has raised the bill for agreement of sale with note that client is supposed to pay service tax under reverse charge
Because of renting of property is client becomes business entity? No other activity is there by the client.
It's very clear that renting of 1 property & subsequent sale of same does not imply that seller is Business entity. So, your client not laible to service tax
As per definition "Business Entity” means any person ordinarily carrying out any activity relating to industry, commerce or any other business or profession:
Renting of property - can't be said to be for commerce ?
If there are four properties given on rent and one of them is sold. Will your reply differ?
Still i would not say that the the client is business entity. Mere sale of one property is not at all Business purpose. The business involves consistent sale AND purchase of properties during the year
CAclubindia
