Whether goodwill is a service?

This query is : Resolved

CA Ganesh Karthik (Querist)
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25 April 2012 Dear Expert,

Whether there is any notification or clarification from the CBEC relating to the taxability of goodwill?

My query is regarding the transfer of business.. If I pay in excess of the fair value of the business, will that excess be regarded as a service?

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Expert)
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25 April 2012 No it cannot be treated as service, it is pure transaction of sale and also something is being transferred permanently and not temporarily and therefore, you also cannot classify this transaction under 'intellectual property service'

CA Ganesh Karthik

CA Ganesh Karthik (Querist)
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25 April 2012 Thank you sir.. But is there any clarification or notification or case law in this regard?

Because this issue is raised by the Department during audits!

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