Actionable claim

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Smit Agrawal

Smit Agrawal (Querist)
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30 October 2014 Can any one explain me the concept of actionable claim under service tax in easy language..???

Annu Agarwal

Annu Agarwal (Expert)
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31 October 2014 First thing you need to know is that transaction in actionable claim is exempted from service tax.

Now the question is,what is actionable claim??
Section3 of Transfer of Property act says,actionable claim is a CLAIM
(i) to a debt which is not secured by any immovable property or secured by hypothecation of a moveable property .In simple words we can say actionable claim claim to is as unsecured debt.
Eg:A borrows Rs2000 from B at a rate of 12% p.a on 01.10.2014 to be repaid with interest on 01.12.2014,so till 01.12.2014 the debt is a accuring debt and a actionable claim.
Or
(ii) actionable claim is a claim to a beneficial interest in a moveable property, not in possession either actual or constructive .
This means that the beneficial interest is not in possession of the claimant.Beneficial interest means a right in something and not a Title to that something.
Eg:A right to receive income accuring from a moveable property is a beneficial interest in that movable property.Please note though the income accruing from the moveable property may be in nature of consideration for a taxable service provided,like hiring charges of a moveable property.But the right to receive that income is a actionable claim and if the same is transferred ,then it would be a transaction in actionable claim .

More examples of actionable claims are:
1.Unsecured debt
2.Right to participate in the draw of lottery to be held
3.right to claim and recover insurance money
4.Claim for share in partnership

Hope you are clear with the term actionable claim.

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