Delhi High Court overrules its earlier decision on Service Tax on Renting

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.

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Comments (6)

inderjeet sharma

Wrote on 24 January 2012

i've property on rent in okhla industrial area(new delhi),its a manufacturing co. and owner is asking for service tax shall i pay that tax????please revert me asap..

prakash sahay

Wrote on 31 December 2011

I agreeto kelly go0vt. isabsolutely against business. The laws are made against business. Disgrace. It is all because of corruption.

Pawan

Wrote on 23 December 2011

I mean even a layman knows that giving property on rent involves no service...u dont have to invest ur time.... Govt. only just want to extract money, it should rather indulge in financial propriety in its expenses

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