Service Tax on Renting – Board Wants Field to Apply P&H High Court Judgement
CBEC, in a recent letter to the Chief Commissioners and Commissioners brought to their notice the landmark judgement of the Punjab and Haryana High Court in in the case of M/s. Shubh Timb Steels Limited Vs UOI (), wherein the validity of levy of service tax on renting of immovable property was upheld.
The Board notes that the High Court deliberated in detail the issues, namely,
(i) whether renting on immovable property constitutes rendering of services;
(ii) whether Parliament has legislative competence to levy service tax on renting of immovable property;
(iii) whether it impinges upon the jurisdiction of State Legislature to levy tax on property (Entries 18, 45 and 49 of List-II); and
(iv) the validity of retrospective amendment,
and has decided the issues in favour of revenue.
Board wants the field formations to apply the ratio of this judgement in defending the pending litigation. But the Board is totally silent on the “Home Solutions” case.
CBEC Letter in F. No.276/282/2010-CX.8A(Pt.); Dated December 02, 2010