Negative list treatment of immovable property renting limited service tax liability to the pre-01.07.2012 period.

Renting of immovable property by market committees was taxable under section 65(105)(zzzz) of the Finance Act, 1994 up to 30.06.2012, but once the activity entered the negative list from 01.07.2012, service tax could not be levied for the later period. Applying the earlier Supreme Court ruling on the same assessee, CESTAT sustained the demand only for 01.04.2012 to 30.06.2012 and set it aside for 01.07.2012 to 31.03.2013. The assessee thus obtained partial relief, with tax liability confined to the pre-negative-list period.

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Issues: Whether service tax under the category of renting of immovable property service was leviable for the period 01.04.2012 to 31.03.2013, and if so, for which part of that period.

Analysis: The dispute concerned levy under section 65(105)(zzzz) of the Finance Act, 1994. The earlier Supreme Court decision on the same assessee had settled that such renting activity was taxable up to 30.06.2012, but not taxable from 01.07.2012 onwards because the activity was brought within the negative list. Applying that ruling, the demand could survive only for the pre-negative-list period. The order also accepted that the later period could not be confirmed as service tax.

Conclusion: Service tax was leviable only for the period from 01.04.2012 to 30.06.2012 and was not leviable for the period from 01.07.2012 to 31.03.2013.

Final Conclusion: The demand was sustained only for the pre-01.07.2012 period and set aside for the remaining period, resulting in partial relief to the assessee.

Ratio Decidendi: Renting of immovable property by market committees was taxable before 01.07.2012, but once the activity fell within the negative list from that date, service tax could not be imposed for the later period.

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