CESTAT Dismisses Department’s Appeal, Rules Fitout Lease as Deemed Sale, Not Subject to Service Tax

CESTAT dismissed the department's appeal, ruling that a fit-out lease constitutes a deemed sale and is not subject to service tax. The tribunal examined the nature of transactions involving the leasing of fitted-out premises and concluded that they possess the characteristics of a sale of goods rather than the provision of a service. This classification has significant implications for the tax treatment of such transactions, determining whether they fall under the purview of sales tax/VAT or service tax laws. The CESTAT's decision provides clarity on this issue.