The appellant is registered for providing various services including banking and other financial services. Assessee provided non-binding investment advisory services to its holding company situated in Mauritius. During the course of audit of the account of the assessee by the Departmental Officers, it was noticed that the appellant has rendered non-binding investment advisory service to its holding company i.e. M/s, Ivahone Hoardings Mauritius (IHM). The department, after considering the agreement relevant to the case, was of the opinion that the appellant had rendered services in the nature of “Real Estate Advisory Servicers” which were liable to payment of Service Tax under Real Estate Agent Service under Section 65 (88) of the Finance Act, 1994. The Service Tax was demanded from the appellant on reverse charge basis.
The appellant contention was heard, the Adjudicating Authority held that the definition of ‘Real Estate Agent’ under section 65(88) clearly states that it covers any service only in relation to sale/purchase/leasing, etc. of real estate. Upon perusal of the Advisory Service Agreement dated 10-3-2009 between the assessee and its holding company, it is seen that the assessee is required to render investment advisory services to holding company in connection with investment opportunities in India. It is clear that such services have been rendered relating to various companies engaged in the business of real estate. The scope of the agreement does not cover such advisory services in connection with any piece of real estate. Consequently, the activities rendered will not be covered within the definitions of ‘Real Estate Agent’ under section 65(88) and ‘Real Estate Consultant’ under section 65(89). In view of the above, the demand of service under the category of ‘Real Estate Agent Service’ was not justified and deserved to be set aside.
Citation: [2018] 96 taxmann.com 323 (New Delhi – CESTAT)