A full bench of Delhi High Court has overruled its earlier decision on constitutional vires of levy of service tax on Renting of Immovable Property Services.
Vide order dated 23-9-2011 delivered in the case of Home Retail Soulutions, the court has overruled the decision of its devision bench delivered in March 2008 holding that there is element of value addition in renting of immovable service for furtherance of business and commerece and it is in competence of parliament to levy tax on such service. Court also held that the amendmend brought by Finance Act 2010 was curative in nature.
Earlier Hon'ble Punjab and Haryana High Court, Gujarat High Court and Bombay High Court have also upheld theconsitutional validity of levy of service tax on renting of immovable property.
Government appeal before earlier Delhi High Court decision has been admitted by Hon'ble Supreme Court but its operation has not been stayed.