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Levy of Service Tax on Salami or Premium


Salami - Negative list - Non taxable

With respect to taxability of salami under the negative list regime of services, although exclusion is restricted to cases involving transfer of title in immovable property, however what would be imperative to note here would be the valuation part.
Since salami is paid for transfer of interest in the leasehold land and not towards rendition of services (i.e. continuous enjoyment of the leased land), such amount should not be taxable. Refer the decision of Apex Court in the case of CIT vs. Panbari Tea Co. Ltd ((1965) 3 SCR 811) and the Greater Noida case, as relied.

Regards,
Ajay Sanwaria

jaiprakash rao 10/07/2015

 

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