Loading...

⚠ ✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 Filters / Advanced Search ❯
TEXT

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Category: ?
Categorized by AI
---- All Categories ---- ❯
  • ---- All Categories ----
  • Income Tax
  • GST
  • Customs, DGFT & SEZ
  • FEMA & RBI
  • Corp. Laws, SEBI & IBC
  • PMLA, Black Money & ED
  • Budget
  • News and Press Release
  • PTI News
Month:
---- All Months ---- ❯
  • ---- All Months ----
  • January
  • February
  • March
  • April
  • May
  • June
  • July
  • August
  • September
  • October
  • November
  • December
Year:
---- All Years ---- ❯
  • ---- All Years ----
  • 2026
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
☰   Show Results ❯
    15th Meeting of ASEAN-India Trade in Goods Agreement (AITIGA) Joint Committee held during 6-9 October 2026
    Commerce Secretary Shri Rajesh Agrawal Highlights Need for Rigorous Legal Thinking at CTIL’s 9th Anniversary Celebration
    Release of Draft Guideline for Compilation Gross State Domestic Product (GSDP) Estimates by Expenditure Approach with Base Year 2022-23
    NLMC Invites Bids for Monetisation of 5.119-Acre Prime Freehold Land Parcel of HIL (India) Limited in New Delhi
    Union Finance Minister Smt. Nirmala Sitharaman on visit to Singapore for high-level meetings with Singapore Leadership and CEOs of business firms in S...
    Recommendations of the 57th Meeting of the GST Council
    India Began Building Bridges When the World Was Building Walls: Union Minister of Commerce and Industry Shri Piyush Goyal
    CCI approves acquisition of sole control over Omega-Meyer Ltd and Meyer Organics by BCPE Wellbeing Holdco Two Ltd. and Integral Investments Asia IV Lt...
    CCI approves proposed acquisition of 100% shareholding of Vishavari Tollway Ltd and nine SPVs operating road assets in India by Concessoc 41 SAS
    CCI approves acquisition of certain shareholding in Prestige Hospitality Ventures Limited by CPP Investment Board Pvt. Holdings (4) Inc.
    CCI approves proposed combination related to internal restructuring of the JSW Group
    NLMC Organises Mock E-Auction Training Ahead of RINL Land E-Auction
    Central Bureau of Narcotics (CBN) conducts Jan Samvad at Malana in Kullu District to create preventive drug awareness and to promote development
    Adopted Joint Statement after the India-UK Financial Markets Dialogue 2026, held in London
    Commerce Secretary Shri Rajesh Agrawal Calls for Greater Utilisation of India-EFTA TEPA Opportunities
    Commerce and Industry Minister Shri Piyush Goyal Holds Meetings with Leading U.S. Companies in New York to Strengthen India–U.S. Trade and Investmen...
    Monetary Policy Statement, 2026-27 Resolution of the Monetary Policy Committee October 5 to 7, 2026
    An Approach Paper on Expanding the scope and coverage for the Index of Services Production
    DRI cracks down on cross-border gold smuggling along Indo-Bangladesh border; seizes over 8.3 kg foreign-origin gold; 4 arrested
    Secretary, DFS, Shri Sanjay Lohiya chairs review meeting on progress of Financial Inclusion Schemes with senior executives of Public Sector and Privat...
❮
❯
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

News
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
October 9, 2026
Show AI Summary
AITIGA review negotiations face time-bound subcommittee deliverables to resolve policy issues and modernise trade arrangements.
The AITIGA Joint Committee directed its sub-committees to accelerate pending review chapters through firm, time-bound deliverables and close coordination. Work covers legal and institutional issues, national treatment and market access, and rules of origin. ASEAN and India reaffirmed their commitment to resolve outstanding policy issues, deepen economic integration, and modernise the Agreement into a balanced and mutually beneficial framework strengthening bilateral trade.
October 9, 2026
Show AI Summary
International investment law requires balance between investment protection and States' regulatory authority amid sustainability and digital trade challenges.
International trade and investment law are increasingly shaped by sustainability-linked trade measures and digital trade and require rigorous legal analysis. CTIL supports trade capacity through legal analysis for free trade agreement negotiations, WTO processes, dispute settlement and institutional knowledge-building. International investment law increasingly recognises States' regulatory authority alongside investment protection, with institutionalisation, legitimacy and the balance between investment and public power identified as central concerns. Research and capacity-building also address climate, sustainability, supply chains, artificial intelligence and other emerging trade-policy areas.
October 9, 2026
Show AI Summary
Expenditure-side GSDP compilation framework standardises regional estimates through common methods, local data sources, and allocation indicators.
Draft guidelines establish a uniform framework for compiling expenditure-side Gross State Domestic Product estimates using base year 2022-23. They cover data sources, estimation procedures and methodologies for private and government consumption, gross fixed capital formation, inventory changes, valuables and net exports. State-specific data and allocation indicators are preferred, while recommended allocation methods support consistent estimates where direct subnational data are unavailable. The approach is intended to harmonise estimation practices and strengthen subnational national accounts capacity.
October 9, 2026
Show AI Summary
Freehold land monetisation proceeds through a two-stage electronic sale requiring technical bids and an Earnest Money Deposit.
Monetisation of a 5.119-acre freehold industrial land parcel owned by HIL (India) Limited at Najafgarh Industrial Area, New Delhi, is facilitated through an E-Tender followed by E-Auction. Eligible bidders must complete registration, submit technical bids, and furnish the required Earnest Money Deposit or Bank Guarantee by the stipulated deadline. Sale is subject to "as is where is", "as is what is", "whatever there is" and no-recourse or no-complaint conditions. The exact land extent is to be determined through a joint survey with the successful bidder.
October 9, 2026
Show AI Summary
India-Singapore investment cooperation advances through investor engagement, financial connectivity, capital-market participation, and support for identified investment opportunities.
India-Singapore investment cooperation is to be strengthened through engagements with political leadership, business representatives and global institutional investors. Discussions cover trade and investment, digital financial connectivity, capital markets, taxation, advanced manufacturing, skilling and aviation. The National Investment and Infrastructure Fund and GIFT City are identified as channels for Singaporean capital participation through investment vehicles and funds. The Ministry of Finance will facilitate connections between investors, Indian companies, financial institutions and State Governments for identified investment opportunities.
October 8, 2026
Show AI Summary
GST process reforms propose automated registration, refunds and return corrections while easing enforcement, credit access and trade compliance.
GST process reforms propose automated registration, registration amendments and cancellation, return reconciliation, input tax credit correction, and phased system-based refund processing. Standardised demand notices and adjudication safeguards are proposed alongside lower penalties, capped penalty-only appeal pre-deposits, withdrawal of arrest powers and narrowed prosecution provisions. Input tax credit reforms would expand refunds and remove specified blocked-credit restrictions, while export measures would broaden zero-rated and export-of-services eligibility. Goods interception would be intelligence-based and authorised, with further compliance relief for small taxpayers and targeted classification, exemption and reverse-charge measures.
October 8, 2026
Show AI Summary
Free trade agreement utilisation enables MSME market access, rules-of-origin awareness, export participation, and foreign investment opportunities while protecting sensitive sectors.
Free Trade Agreements are positioned to preserve sensitive domestic interests, particularly agriculture, fisheries and MSMEs, while widening market access for agricultural, marine, engineering, precision and electronic products and facilitating foreign investment. Proposed FTA utilisation desks across State Councils would assist MSMEs in using preferential arrangements, understanding rules of origin and market-access opportunities, participating in delegations and exhibitions, and presenting products and technologies to overseas markets.
October 8, 2026
Show AI Summary
Sole-control acquisition of nutraceutical and pharmaceutical businesses receives competition approval for Bain Capital-managed investment funds.
Competition Commission of India approval permits BCPE Wellbeing Holdco Two Limited and Integral Investments Asia IV Limited, funds managed or advised by Bain Capital, to acquire sole control over Omega-Meyer Limited and Meyer Organics Private Limited. The target businesses provide nutraceuticals globally and in India, while Meyer Organics Private Limited also produces and supplies certain over-the-counter and prescription finished-dose pharmaceuticals in India.
October 8, 2026
Show AI Summary
Highway asset acquisition approval covers full ownership transfer of a tollway operator and road-project special purpose vehicles.
Competition Commission of India approval covers the acquisition by Concessoc 41 SAS of the entire shareholding in Vishavari Tollway Private Limited and nine special purpose vehicles. The target entities operate designated national-highway stretches in Andhra Pradesh, Odisha and Gujarat, while Vishavari Tollway Private Limited provides operation and maintenance and engineering, procurement and construction services for those highway assets.
October 8, 2026
Show AI Summary
Competition clearance for hospitality share acquisition permits investment in a company owning and developing hotel and serviced apartment assets.
Competition Commission of India approved the proposed combination involving CPP Investment Board Private Holdings (4) Inc.'s acquisition of certain shareholding in Prestige Hospitality Ventures Limited. The target is an Indian public limited company within the Prestige group and owns and develops hospitality assets, including hotels and serviced apartments. The acquirer is incorporated in Canada and is managed by Canada Pension Plan Investment Board.
October 8, 2026
Show AI Summary
Internal group restructuring receives merger-control approval for amalgamating an integrated steel producer into the group's steel manufacturer.
Merger-control approval covers the proposed internal JSW Group restructuring through amalgamation of BMM Ispat Limited into JSW Steel Limited. The amalgamation would convert the group's majority interest in BMM into full ownership and is intended to enhance operational, financial and organisational efficiencies through economies of scale, resource pooling and capital rationalisation. BMM is commercially integrated in the group's supply chain through intra-group sales and procurements.
October 7, 2026
Show AI Summary
Transparent land e-auction procedures support bidder preparedness through mock training, registration and earnest-money requirements for phased asset monetisation.
National Land Monetization Corporation is facilitating a two-phase e-tender-cum-e-auction of 459 encumbrance-free land parcels of Rashtriya Ispat Nigam Limited through the RailTel E-Nivida e-Procurement Platform. Participation requires registration, fulfilment of prescribed requirements and submission of earnest money deposit within the applicable deadlines. Physical and online mock e-auction training familiarises prospective bidders with the bidding interface and participation procedure. Investor outreach provides information on plot details, eligibility requirements, registration and bidding conditions.
October 7, 2026
Show AI Summary
Preventive narcotics outreach promotes drug awareness, community participation, and sustainable livelihood alternatives to discourage illicit cannabis cultivation.
Preventive outreach in Malana village promoted drug awareness, youth engagement, community participation and alternative development in an area associated with illicit cannabis cultivation. Residents were sensitised to the harmful effects of cannabis, charas and hashish oil consumption and encouraged to pursue sustainable alternatives, including apiculture, animal husbandry, dairy activities and tourism. Community discussions addressed livelihood barriers, ecological concerns, and commitments to refrain from drug consumption and discourage illicit cannabis cultivation.
October 7, 2026
Show AI Summary
Cross-border financial cooperation guides work on market access, sustainable finance, fintech safeguards, and payment interoperability.
India-UK financial-markets cooperation covers capital-market connectivity, cross-border listings, investor access and development of GIFT IFSC as an international financial centre. Engagement also addresses insurance, pensions, asset management, sustainable-finance disclosures and cross-border investment. Fintech cooperation includes digital public infrastructure, central bank digital currencies, data exchange, responsible artificial intelligence, fraud prevention, cyber security and operational resilience. Cross-border payments work prioritises reduced frictions, transparency, efficiency and interoperability of electronic payment infrastructures.
October 7, 2026
Show AI Summary
Investment commitments and tariff predictability under India-EFTA TEPA support market access, supply-chain planning, and long-term bilateral trade.
India-EFTA TEPA establishes reciprocal market-access commitments, with EFTA coverage extending to most Indian exports and full coverage for non-agricultural products. Tariff predictability is intended to support investment planning, supply-chain development and longer-term business partnerships. Agricultural opportunities may arise where duties have been reduced to zero. Article 7.1 includes an investment commitment under which the EFTA States are to aim to increase foreign direct investment into India and facilitate employment generation within specified implementation periods.
October 7, 2026
Show AI Summary
Foreign investment engagement focuses on expanded partnerships across financial services, manufacturing, insurance, and emerging technologies in India.
India-U.S. trade and investment engagement was pursued through discussions with leading United States companies on expanding investment, partnerships and commercial operations in India. Financial-sector discussions addressed private equity, asset and wealth management, insurance, and financial services, including prospective engagement aligned with the objective of insurance access for all by 2047.
October 7, 2026
Show AI Summary
Policy repo rate recalibration responds to inflationary pressures, adopting calibrated tightening while future actions depend on growth and inflation conditions.
Monetary policy is recalibrated through an increase in the policy repo rate under the liquidity adjustment facility by 25 basis points to 5.50 per cent. The monetary policy stance shifts to calibrated tightening, indicating that near-term rate reductions are excluded and that subsequent action may consist of a rate increase or a pause, depending on evolving conditions and the outlook. Further rate action depends on growth-inflation developments, underlying inflation, broadening price pressures, second-round effects and demand impulses.
October 7, 2026
Show AI Summary
Index of Services Production expansion proposes broader service-sector coverage through education, health, residential care, public administration and defence.
The Index of Services Production is proposed to expand beyond its initial formal-sector coverage, which relies on high-frequency administrative data and GST outward-supplies data. Education, Human Health and Residential Care, and Public Administration and Defence are proposed for inclusion. Their incorporation would increase coverage of services-sector Gross Value Added and support aggregation of sub-sectoral indices into a unified measure of short-term services-sector movements. Stakeholder views are invited on the proposed methodology.
October 7, 2026
Show AI Summary
Cross-border gold smuggling enforcement addresses concealed foreign-origin gold transport through customs seizure, arrest, and investigation of organised networks.
Intelligence-led customs enforcement targeted cross-border gold smuggling through surveillance and interception of four persons travelling from a border route. Personal searches recovered foreign-origin gold biscuits concealed in specially tailored cloth waist belts. Seventy-two gold biscuits were seized under relevant provisions of the Customs Act, 1962, and the four persons were arrested. Investigation continues into organised networks and wider syndicates involved in the movement and distribution of smuggled gold.
October 6, 2026
Show AI Summary
Financial inclusion drives digital lending, insurance claim awareness, portal enrolment, and banking access for marginalised sections.
Banks were urged to expand brick-and-mortar branches and banking correspondent coverage in unbanked villages, strengthen digital outreach, and implement end-to-end digital loan processing. Working-capital lending for micro-enterprises through UPI-linked credit lines and credit cards was highlighted. Banks were also directed to increase awareness of insurance claim eligibility, exercise care in claim-related grievance handling, and enrol new PMJJBY and PMSBY beneficiaries through the Jan Suraksha portal.

News

Back

All News

Showing Results for :
Reset Filters
No Records Found

News

Back

All News

Constitutional Validity of Service Tax on Renting of immovable property

March 7, 2010

Contents
Notifications
Circulars
Acts
Plus +
Summary
Note

Note

-

Bookmark

Print

Print

For Basic provisions- visit: SERVICE TAX ON RENTING OF IMMOVABLE PROPERTY

The concept of Service Tax was introduced first time in 1994, since than the entries into service tax law have undergone sea change and subject to judicial scrutiny from time to time.

Here I try to discuss the constitutional validity of service tax on renting of immovable property specifically, the impact after the retrospective changes proposed by the Finance Bill 2010-2011 [Budget 2010-2011]. Without making this article heavy and to be more specific and to focus on the related issue, I tried to limit my discussion on issue of constitutional validity to the cases decided in respect of entries within service tax only.

Let me start with the decision of the Honorable High Court of Delhi in the matter of HOME SOLUTION RETAIL INDIA LTD. Versus UOI & ORS. Reported in [2009 -TMI - 33136 - DELHI HIGH COURT]

This issue is directly related to service tax on renting of immovable property in which the petitioner has challenged the constitutional validity of the service tax on renting of immovable property. It is strange to note that in the writ petition, the petitioner has not challenged the constitutional validity of the entry 65(105)(zzzz) as such but has challenged the notification as well as scope of entry. The question raised by the writ petitioners is as under:

"In this batch of writ petitions the legality, validity and vires of notification no. 24/2007 dated 22/05/2007 and circular no. 98/1/2008-ST dated 04/01/2008 issued by the Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi is challenged. It is alleged that by virtue of the said notification and circular a completely erroneous interpretation is placed on section 65 (90a) and section 65 (105) (zzzz) of the Finance Act, 1994 as amended by the Finance Act, 2007. It is further alleged that because of this incorrect interpretation, service tax is sought to be levied on the renting of immovable property as opposed to service tax on a service provided "in relation to the renting of immovable property".

2. In essence, the petitioners have raised the question as to whether the Finance Act, 1994 (hereinafter referred to as the said Act) envisages the levy of service tax on letting out/renting out of immovable property per se? According to the petitioners, who are either landlords or tenants in respect of leased premises, no such tax is envisaged under the said act. Consequently, the said notification dated 22/05/2007 and the said circular dated 04/01/2008 are sought to be set aside as being ultra vires the said act."

Why the framers of the writ petitions have challenged the notification and circulars only and not the basic entry as such:

I have heard from various sources and consultants that Honorable High Court of Delhi has avoided to deliver the judgment on the issue of constitutional validity of the new levy of service tax on renting of immovable property, but it has decided the issue and scope of entry "in relation to" in the writ petition.

I do not agree with those comments, if the opening paragraph of the decision dated 18-4-2009 is read carefully, one can find that the levy of service tax on renting as such was never been challenged. So how can one find fault in the decision of the honourable high court?

Most probably the framers of the writ petition knew that the challenge of levy of service tax on renting in the writ petition on the issue of constitutional validity itself is not proper and it is better to challenge the levy on the scope after reading the term "in relation to".

The net impact of the retrospective change and writ petition as decided by the Delhi High Court can be summarized as under:

The order of Delhi High Court dated 18-4-2009 become redundant and fresh writ petitions on the issue of constitutional validity may be initiated with.

Chance to win the case on the issue of constitutional validity

There are two important decision of the honorable Supreme Court which may be kept in mind with reference to present levy that in these two decisions of the Apex Court the main contention of the petitioner was that the issue is related to state and only stat can levy tax on the subject matter and central government has no power to levy service tax on the subject matter. But, the honorable Apex Court did not find merit in the contention of the petitioner and upheld the constitutional validity of levy of service tax.

In the matter of TAMIL NADU KALYANA MANDAPAM ASSN. versus UNION OF INDIA reported in 2005 -TMI - 135 - SUPREME COURT OF INDIA, honorable Apex Court upheld the levy of service on Madap Keeper service. In this case the honorable Apex Court has discussed the scope of the term "in relation to" in depth. The relevant  paragraphs of the judgment are being reproduced as under:

"46.  The legislative competence of Parliament also does not depend upon whether in fact any services are made available by the Mandap-Keepers within the definition of taxable service contained in the Finance Act. Whether in the given case taxable services are rendered or not is a matter of interpretation of the statute and for adjudication under the provisions of the statute and does not affect the vires of the legislation and/or the legislative competence of Parliament. In fact, a wide range of services are included in the definition of taxable services as far as Mandap-Keepers are concerned. The said definition includes services provided "in relation to use of Mandap in any manner" and includes "the facilities provided to the client in relation to such use" and also the services "rendered as a caterer". The phrase "in relation to" has been construed by this Court to be of the widest amplitude. In M/s. Doypack Systems Pvt. Ltd. v. Union of India and Others - 1988 (36) E.L.T. 201 (S.C.) = (1988) 2 SCC 299 at 302, this Court observed as under :

"The expressions 'pertaining to', 'in relation to' and 'arising out of', used in the deeming provision, are used in the expansive sense. The expression 'arising out of' has been used in the sense that it comprises purchase of shares and lands from income arising out of the Kanpur Undertaking. The words "pertaining to" and "in relation to" have the same wide meaning and have been used interchangeably for among other reasons, which may include avoidance of repetition of the same phrase in the same clause or sentence, a method followed in good drafting. The word 'pertain' is synonymous with the word 'relate'. The term 'relate' is also defined as meaning to bring into association or connection with. The expression 'in relation to' (so also 'pertaining to'), is a very broad expression which presupposes another subject matter. These are words of comprehensiveness which might have both a direct significance as well as an indirect significance depending on the context."

XXXXX

58.  The impugned Act was challenged on the ground that it infringed on the State's power to levy tax on luxury vide Entry 62 of the State List.

59.  It would be appropriate to quote Mr. Justice Venkatachelliah who ruled that "the law with respect to a subject might incidentally affect another subject in some way, but that is not the same thing as the law being on the latter subject. There might be overlapping, but the overlapping must be in law. The transaction may involve two or more taxable events in its different aspects. But the fact that there is an overlapping does not detect from the distinctiveness of the aspects. The consequences and facts of the legislation are not the same thing as legislative subject matter."

60.  For the foregoing reasons, the appellants have not made out any case either on facts or on law and there is no merit in this appeal. We, therefore, have no hesitation in dismissing this appeal by confirming the judgment of the High Court for our own reasons recorded in this judgment. No costs"

In the matter of All India Federation of Tax Practitioners & Ors Versus Union of India & Ors reported in 2007 -TMI - 1556 - Supreme Court, honorable Apex Court upheld the levy of service tax on professional services.  The relevant extract of the case is being reproduced as under:

"…….n the present case, we are concerned with the legislative competence of Parliament to legislate in respect of service tax under Entry 97/92C of List I. In the present case, we are concerned with the period covered by the Finance Acts of 1994 and 1998. However, learned counsel for the appellants has relied upon para 82 of the said judgment in the case of Bharat Sanchar Nigam Ltd. (supra) in which it is observed that the residuary powers of Parliament under Entry 97 of List I cannot swamp away the legislative Entries in the State List. Entry 54, List II read with Article 366(29-A), therefore, cannot be whittle down by referring to the residuary provision. As stated above, we are concerned with the application of the above principles. In the present case, as stated above, we are concerned with the Constitutional status of the levy. As stated above, we have to examine the nature of the levy. We have done so and we have come to the conclusion that the word profession in Entry 60 List II cannot be made synonymous with the word service and, therefore, service tax would fall under the residuary Entry 97 read with Entry 92C after 2003. This position is also made clear by Article 268A, inserted by the Constitution (Eighty-eighth Amendment) Act, 2003."

After analyzing the above decision, it appears that there are thin chances in winning the case against the levy. But, it is also true that, honorable Supreme Court of India has the final power to upheld or setaside the levy and yet to decide the matter. Therefore a ray of hope is there and one can approach the Supreme Court for final decision. But, a question of million is there if the assessee chose to file another writ petition or SLPs on the issue of constitutional validity, whether government of India would accept the decision against the levy in case Apex Court found the levy as unconstitutional?

To find the answer to this complexity, I wish to travel to the decision of Honorable Supreme Court in the matter of  LAGHU UDYOG BHARATI versus UNION OF INDIA reported in 2005 -TMI - 18 - SUPREME COURT OF INDIA, in which the provisions relating to levy and collection of service tax from the recipient of services was decaled as ulta-virus of the act. After the decision of the Apex Court dated 27-7-1999, our legislature has amended the law with retrospective effect and validated the same also as is done in case of renting in the present scenario.

Therefore, there is no doubt in my mind that government of India would not leave any stone unturned to ensure that levy and collection of service tax renting of immovable property with retrospective effect. It may be an academic exercise to fight the issue in the appropriate court but one must understand that nobody can ignore the legislative intention.

Conclusion:

A careful reading and interpretation of the decisions of the Apex Court shows that there is wide difference in the scope of entries in the State List and Union List of the Seventh Schedule of Constitution of India.  Despite the above decisions of the Apex Court, and to remove the ambiguity in the entries, the legislature has made the amendment with retrospective effect. Therefore, it is likely that the entire community who engaged in the business of renting would not find any escape route and would start paying service tax on the renting of immovable property. It is there decision of spend huge money and time in litigation or to start paying service tax obeying the intention of the legislature.

 

Surender Gupta

Topics

Acts Income Tax