Service tax applicability on rent

[ASHOK CHOUDHARY]

Is service tax on rent is payable on the property situated in Mumbai. The location of the premises is also important for the service tax on the rent payable to govt.

[Rama Krishana]

In my view the decision of Delhi High Court in respect of renting of immovable property and service tax is applicable all over India and therefore, you are not liable to pay service tax on renting.

[CA UMA KOTHARI]

I agree with Mr.Rama Krishana that the decision of Delhi High Court in respect of renting of immovable property and service tax is applicable all over India and therefore, you are not liable to pay service tax on renting. I add reason for this- the Delhi High Court has set aside the notification is ultravirse the FA 1994 realting to tax on particular service. In case of Service TAx, provisions levying tax become applicalbe on notification being issued- the notificatioan is for all over india. so once notification is set aside or held ultravirse the FA or Constitution, the levy fails. To discuss the issue let us find a difference, when a provision of the Act is interpreted by a high Court, the opinion of the High Court is binding only in its jurisdictional areas. This is not applicable when a notification meanst for all India is struck off, set aside or or is held ultravirse the particualr Act or the Indian Constitution.

AI Summary

Service tax on renting immovable property not payable where impugned all India notification is struck down as ultravires.
Where the all India notification authorising service tax on renting of immovable property is struck down as ultravires, the statutory levy dependent on that notification fails nationwide; invalidation of an all India notification removes the mechanism making the tax operative beyond the territorial limits of a single High Court's jurisdiction.