Service tax on hotel room renting for mandap use was held inapplicable, while hall-related letting remained taxable.

Service tax was held not leviable on amounts attributable to renting of hotel rooms when the hotel and its garden were rented out for mandap use. The Tribunal noted that an earlier stay order had taken a prima facie view that tax was not payable on charges recovered for renting the hotel, and relied on precedent indicating that the levy in this context applied to halls attached to a hotel, not to hotel rooms. The impugned order was set aside.

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Issues: Whether service tax was leviable on the amounts attributable to renting of hotel rooms when the hotel and its garden were simultaneously rented out for mandap use.

Analysis: The Tribunal noted that the earlier stay order had taken a prima facie view that service tax was not payable on the charges recovered for renting the hotel. It further held that the cited precedent supported levy of service tax only on renting of halls attached to a hotel and not on renting of hotel rooms.

Conclusion: Service tax was not leviable on the charges attributable to renting of the hotel rooms, and the impugned order was set aside.

Ratio Decidendi: Levy of service tax on hotel-related letting extended to halls attached to the hotel, but not to renting of hotel rooms.

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