Manish Sir, X ltd is not providing any Bank Guarentee here. Bank Guarentee here refers to a transaction where X needs to pay a Deposit to Y or needs to purchase something from Y where Y is demanding advance. In this place, as X is unable to pay the deposit / advance, X's  Banker can give a bank guarentee that in the Bank will pay the amount to Y, if Y fails so.

Here, X lld does not provide any such service.

But we are here to discuss. Thanks for bringing this point. I didn't not look into this service before. But still accoriding to me it will be taxable under BAS.

Shiva

Shiva,

I raised also same query as per you but Some answer received from friends which is below: 

Just for reading....Because we are here to discuss.

Manish Sir,

Hmmm, interesting. But if Y does not pay, then X has to pay or else its Land is taken away. Hence you are trying to say that it is also a form of Bank Guarentee. Sounds good, but i am not feeling comforable with providing a mortage to be considered as Bank Guarentee. May be even Service tax department might take a stand like this.

I agree with your point, it may (may be) classifiable in Banking services too. What about your take on BAS.

Shiva

Hhhh..Its is very confusing. In my Opinion,BAS measn any services which are not cover under other services then you can put in BAS. You  may be right in this case because this is not our routinue process regarding documents transfer. So we can put in BCA but as per dept study it cover under banking service. Some one says that Intellectual Propery service but as per my opinion it comes under Banking service because nature of transation cover banking transation under bank guarantee.I am also trying to get view from other so we can clarify this.

This for reading view which i got. So please read this.

INTELLECTUAL PROPERTY SERVICE  AS X NOT TRANSFER LAND BUT IT HAS JUST GIVEN INTANGIBLE RIGHT TO BANK. AS X LAND IS MORTGAGE. AND IN REWARD X IS GETTING SECURITY COMMISSION OR SECURITY INCOME.

Dear Shiva,

U made me confused with ur answer, First u said that TDS will be deducted u/s 194 H by imphasising on the defination of commission & then u said that service tax might not be charged due to reasons that it doesnot involve any service

194 H “commission or brokerage” includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities;

That means if u cover it under 194 H then Service tax will also be charged...

My contention is that TDS will be deducted u/s 194 C since it doesnot involve provision of any service..& on the same plea Service Tax will not be charged...

Dear Manish,

I don't think that the above arrangement gets covered by "Banking or Financial Service" if we don't assume that "X" is a Bank or Financial Institution or NBFC's or any other institution of this kind.

Mr.Amir, I have said this transaction is covered under Service Tax. I think you are talking about my "Prima Facie commen"t. Please read my other comments where i have done a detailed discussion and said Service Tax is applicable.

I am also editing the comment which caused this confusion.

Shiva

Also, Amir, how can you classify something under 194C, I don't think this transaction is covered under a Contract as defined under Section 194C.

Shiva

Dear Friends

This is for your reference

Stray Service is not taxable

A person who is not in business of providing a particular service provides the service in a stray case.He is not known as provider of that service .In that case,the service will not be taxable CCE v.Chandan Metal Products (2009) 19 STT 18 (cestat)-relying on shakumbari sugar v.cce(2006) 5 STT 247(cestat)

one of our client have made a mistake while depositing TDS, instead of depositing TDS under section 195 wrongly they have prepared challan Under 194C request you to please tell me, that what corrective actions are to be taken in regards to this to change the data in NSDL.also if I want to  file e-tds returns of them what I have to do first. tahnks

Dear friends,

I think no tds or service tax applicable on this deal,

and Dear Mr. Amir , since it cant be said a contract betn these comapanies so sec 194c is not applicable

and this is not a service which is convered under service tax act, hence not st require to be deduced,

however, if u come to know some thing else, pl reply

Dear Shiva Sir,

To attract 194H, there should be "payment received or receivable, directly or indirectly, by a person acting on behalf of another person",

1. for services rendered or

2. for any services in the course of buying or selling of goods or

3. in relation to any transaction relating to any asset, valuable article or thing, not being securities"

Pls let me be devil's advocate - only so that i can learn properly.... Please see i am not debating u, rather i want to know the correct answer.

I say that there is no "acting on behalf of" the bank done by X Company here... TDS cannot be attracted u/s 194H. I think there is not TDS applicability b cos there is no intention to execute on behalf of another person…… Same should also not be interpreted as brokerage…..

One question to Jitendra, is X Co a co-applicant to the loan?

Dear Friends,

All those who r supporting that TDS is not attracted on above arrangement,

194C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor^71a) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract......................

I know the term "work" is defined in the section BUT FRIENDS THAT DEFINITION IS INCLUSIVE ONLY 

Now my views are:-

1) Scope of Sec 194 C  is very wide.....

2) Those who r supporting that above deal is not a "CONTRACT", Plz Explain on what basis u guys r saying, It is not necessary that a contract should be writing, Now doesn't Co. X contracted to provide the title deeds in favour of Co. Y????

Guys trust me, I m not being fussy, just want to know what exactly the treatment would be.... 

Dear GK

X is no co applicant to the loan.

Dear GK

To attract 194H, there should be "payment received or receivable, directly or indirectly, by a person acting on behalf of another person", -. in relation to any transaction relating to any asset, valuable article or thing, not being securities

In this view,Payment received or receivable,directly or indirectly, by X, acting on behalf of Y" to bank.Here X compnay indirectly involved in this transation  because x is giving documents to Y and y is giving to bank.So X is not directly giving documents to bank.

Here  intention to execute on behalf of Y company. So in my opinion it covers under 194 H.But some of mine friends had faced this problems in their company so they are deducting TDS under contract and they have already signed contract between group company.

In regard to service tax :Some one has written  these below case:

A person who is not in business of providing a particular service provides the service in a stray case.He is not known as provider of that service .In that case,the service will not be taxable CCE v.Chandan Metal Products (2009) 19 STT 18 (cestat)-relying on shakumbari sugar v.cce(2006) 5 STT 247(cestat)

I am confirming this case and come back with answer.Any one have other answer then please post:)