- Nov
- 11
- 2009
Instruction regarding judgement of Delhi High Court in respect of Service Tax on “Renting of immovable property”
Instruction F.No 336/10/2009-TRU – Dated 15-7-2009
Kind attention is invited to the recent judgement of the Honourable High Court of Delhi in the matter of Home Solutions Retail India Ltd and Others Vs Union of India [2009] 20 STT 129 (Delhi) , wherein it is held (Para 36 of the order) that, “Section 65(105)(zzzz) does not in terms entail that the renting out of immovable property for use in the course of furtherance of business of commerce would by itself constitute a taxable service and be exigible to service tax….”
2. It is understood that, consequent to the said judgement of the Honourable High Court of Delhi, many assessees have stopped paying service tax on the renting of immovable property for business or commerce.
3. In this regard, all the service tax formations are informed that the Department has filed an appeal against the said order of the Delhi High Court, and the dispute has not reached finality. Given the situation, service tax formations throughout the country, are instructed to take necessary action to safeguard revenue by either pursuing the tax payer to pay up the service tax due or resort to means under law to protect the revenue.
[F.No 336/10/2009-TRU]
Sandeep Kanoi+
i came to know that Supreme court had fixed a date for the final decision on this matter, i e. 24th Feb, i wantted to know if any one can update me on this regard, if there is any final decision?
Okay, then I along with the other readers stand corrected and thank you once again for putting it up for our perusal.
Thanks,
Kuunal
This instruction is dated 15.07.2009 but this was issued only in second week of November 2009.
Thank you Mr Kanoi for putting up the said circular, it is very useful, even though it is old.
Thanks,
Kuunal
Hi, Some of our tenants are stopped paying service tax from April 2009 relying on the Delhi High Court Judgement and accordingly we are not remitting the service tax to the department.
Now with the above instruction, What should be the next course of action? Whether they can inforce the Revenue Recovery procedings?
Kindly give your expert comments.
Many people stopped collecting and paying servicetax on rent of property.
It would be better the FM bring a quick amendment to settle the issue to reduce litigation.
It is understood that Govt has filed an appeal before the Apex Court but the Hon’ble Supreme Court has not granted any stay on the operation of the judgement of Hon’ble Delhi High Court. In the absence of any ad-intereme injunction or reversal order, how can the Service Tax Department force the tax payers to pay the service tax.
Kindly give your expert comments.
Somehow it skipped publication on our site and I got lot of mails asking for this so Published for the benefit of our site visitors.
Hi boss.. This is a circular instruction dated 15.7.2009 and was seen by us long back.. why is this resurfacing now ????