- Jan
- 23
- 2011
Renting of Immovable Property-There shall be no recovery of service tax from the service provider in respect of renting of immovable property alone
Prima facie renting of immovable property itself
has been regarded as a service by virtue of the recent amendment made by Finance Act, 2010, even though this Court by virtue of its
decision on 18-4-2009 had categorically concluded that renting of immovable
property by itself cannot be regarded as a service
CASE LAWS DETAILS
DECIDED BY: HIGH COURT OF DELHI, IN THE CASE
OF: Home Solutions
Retails Ltd. v. UOI, APPEAL NO: W. P. (C) 3398/2010,
DECIDED ON May 18, 2010
RELEVANT PARAGRAPH
FACTS
In this writ petition there is a challenge to
section 65(105)(zzzz) of the Finance Act, 1994 inasmuch as it
purports to levy service tax on
the renting of immovable property to be used for commercial / business purposes.
This provision has been recently amended by the Finance Act, 2010
with retrospective effect from 1-6-2007.
HELD
Prima facie renting of immovable property itself
has been regarded as a service by virtue of the recent
amendment even though this Court by virtue of its
decision on 18-4-2009 had categorically concluded that renting of immovable
property by itself cannot be regarded as a service.
Issue notice. Notice is accepted by the counsel
appearing on behalf of the respondent Nos. 1 and 3 and the counsel appearing on
behalf of the respondent Nos. 2 and 4. Notice shall issue to respondent
5-10.
The respondents shall file the counter-affidavits within four weeks and the
petitioner shall file the rejoinder/ affidavits
thereto within two weeks thereafter. In the meanwhile, there shall be no
recovery of service tax from the petitioner in respect
of renting of immovable property alone. No such service
tax would also be recovered from respondents 5-10 in the meanwhile.
It is made clear that in the event the writ
petition is dismissed, the liability to pay service
tax along with any other liability as a result of the demand made, will
solely be that of the petitioner. We make it clear that there is no challenge in this writ petition to the second
part of the aforesaid provision, namely, “any other service in relation to such
renting” and consequently, if there is any other such service, the service provider would be liable to
pay service tax on such service and in respect of this
portion of the provision there is no stay.
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