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Case Law Details

Case Name : Peninsula Hotels (P) Ltd Vs Commissioner Of GST & Central Excise (CESTAT Chennai)
Appeal Number : Service Tax Appeal No. 42062-42063 of 2013
Date of Judgement/Order : 09/06/2023
Related Assessment Year :
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Peninsula Hotels (P) Ltd Vs Commissioner Of GST & Central Excise (CESTAT Chennai)

CESTAT Chennai held that license fee are accruing to appellants is based on the turnover and profits of the hotel business. Accordingly, such transaction cannot be one of ‘renting of immovable property’ as the consideration is not like a regular rent but is dependent on the annual performance and profits of the hotel.

Facts- The appellant had entered into an agreement with M/s. GRT Regency (herein after referred to as “GRT”) by which GRT obtained lease of the Hotel and the premises. GRT then obtained registration for providing ‘Outdoor Catering Services’ and ‘Mandap Keeper Services’. During the scrutiny of records of GRT it was noticed that GRT had entered into an agreement dated 21.06.2010 with the appellant.

It appeared to the Department that the license fee is nothing but rent paid by GRT to the appellant towards renting of the appellant’s premises of M/s. Peninsula Hotels (P) Ltd. The activity was taxable under Renting of Immovable Property Service and the appellant is liable to pay service tax on the amounts received from GRT. The appellant had not paid service tax on such amounts received by them.

Show cause notice was issued to the appellant proposing to demand service tax along with interest and for imposing penalties. After due process of law the original authority confirmed the demand along with interest and imposed penalties. On appeal the Commissioner (Appeals) upheld the same. Aggrieved by such order, the appellant is now before the Tribunal.

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