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of <h1>Tribunal Upholds Service Tax Liability on Renting Premises</h1> The Tribunal upheld the Service Tax liability and interest on renting out premises, emphasizing that non-payment of tax on immovable property attracts ... Service tax liability for 01.06.2007 to 31.03.2010 - levied on value of rent received for the premises - Renting of Immovable Property - Section 65(105)(zzzz) of the Finance Act, 1994 - Appellant rented their premises to various clients under lease agreement and collected Service Tax from them - Held that:- the issue of discharge of Service Tax liability on the amount of rent collected is no more res integra as due to retrospective amendment tax needs to be discharged for the material period in question and we uphold the same. As regards interest is not payable on Service Tax, we do not agree with the contention raised by the Chartered Accountant for the simple reason that the Service Tax liability was always leviable on the immovable property, hence non payment of tax attracts interest. Accordingly, the Service Tax liability and interest thereof are upheld. Imposition of penalty - Held that:- the appellant having discharged the Service Tax liability and the interest thereof has to be extended the benefit of Section 80(2) of the Finance Act, 1994. These provisions were specifically brought into statute in order to not to impose penalty on the service providers under the renting of immovable property during relevant period, accordingly appellant need not be vitiated (sic) with penalty. - Appeal disposed of Issues involved: Service Tax liability on renting of immovable property, interest on Service Tax, penalty under Section 80(2) of the Finance Act, 1994.Service Tax Liability on Renting of Immovable Property:The case involved the appellant's Service Tax liability for renting out premises under Section 65(105)(zzzz) of the Finance Act, 1994. The appellant had rented their premises to clients under lease agreements and collected Service Tax. The Tribunal noted that due to a retrospective amendment, the appellant was required to discharge the Service Tax liability for the relevant period. The Tribunal rejected the appellant's argument that Service Tax should not be levied on the rent received for the premises, emphasizing that non-payment of tax on immovable property attracts interest. Consequently, the Tribunal upheld the Service Tax liability and the interest on it.Interest on Service Tax:The Tribunal disagreed with the appellant's contention that interest is not payable on Service Tax, stating that the liability was always applicable to immovable property. Therefore, the Tribunal upheld the interest on the Service Tax amount, emphasizing that non-payment of tax on immovable property attracts interest.Penalty under Section 80(2) of the Finance Act, 1994:Regarding the penalty imposed by the adjudicating authority, the Tribunal considered that since the appellant had discharged the Service Tax liability and interest, they should benefit from Section 80(2) of the Finance Act, 1994. This section aims to prevent penalties on service providers under the renting of immovable property during the relevant period. Consequently, the Tribunal set aside the penalties imposed on the appellant.In conclusion, the Tribunal upheld the Service Tax liability and interest while setting aside the penalties imposed on the appellant under Section 80(2) of the Finance Act, 1994. The appeal was disposed of accordingly.
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