Rattha Holding Company Pvt Ltd Vs Commissioner of GST and Central Excise (CESTAT Chennai)
In the case of Rattha Holding Company Pvt Ltd vs Commissioner of GST and Central Excise (CESTAT Chennai), the issue of service tax liability on renting immovable properties was contested. The appellants faced allegations of not discharging service tax obligations on various transactions, including renting out property for accommodation and other services.
The appellants, registered for providing Renting of Immovable Property services, were accused of not paying service tax on rentals received from M/s. Siesta Hospitality Limited (SHSL) for accommodation services and from M/s. Ascott (Mauritius) for share sales, among other charges. The Department issued a Show Cause Notice proposing service tax demands, interest, and penalties. After adjudication, the Original Authority confirmed the demands.
Renting of Immovable Property Services
The contention focused on whether service tax was applicable to properties rented out for accommodation. The appellant argued that since the premises were leased for guest rooms and related amenities, falling under accommodation services, service tax was not applicable. CESTAT Chennai analyzed the lease deed and concluded that when premises are rented for accommodation purposes, including hotels and hostels, service tax is not leviable. Consequently, the demand was set aside.
