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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Tags : Taxation

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Comments

11 years ago QAWI

Hi All, I own a property and now it is it going on rental, I want to know who shall bear the service tax. Please email me the details at qawis41@gmail.com

11 years ago QAWI

Hi All, I own a property and now it is it going on rental, I want to know who shall bear the service tax. Please email me the details at qawis41@gmail.com

11 years ago QAWI

Hi All, I own a property and now it is it going on rental, I want to know who shall bear the service tax. Please email me the details at qawis41@gmail.com

12 years ago Rajesh Thakker

There is two type of renting of the commercial property. one is involve with furnished and maintained by the owner, they provide a security, cleaning of common area etc and other is plain renting without any extra facility. As per me service tax will not applicable on renting of the plain property. The Hon'ble High Court observed 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. " This state that not merely renting but involvement of some more elements into renting of property. Therefore, service tax will applicable on such elements.

13 years ago inderjeet sharma

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..

13 years ago prakash sahay

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

14 years ago Pawan

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

14 years ago venkatkrishna

It is true and agree with Kelly and JPC. Judiciary role is only to act on dotted lines by Parliament. Public is just a balll in the hands of politicos and always Judiciary is 80% govt favour. These Executive and Judiciary system are running beyond ground reality.

14 years ago kelly

IT IS ALL A MESS BY THE SO CALLED SYSTEM OF EITHER NO REGULATION OR OVER REGULATION. i feel ashamed to be associated with this country where all are anti business. mera bharat mahan