Case Law Details
Spencer International Hotels Ltd Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that renting of immovable property for a hotel is expressly excluded from the ambit of the taxable service in Section 65(105)(zzzz) of the Finance Act, 1994. Accordingly, demand not sustainable.
Facts- Intelligence was gathered that the appellant is providing taxable service and has not registered themselves nor paid any service tax for service rendered under the category of ‘Renting of Immovable Property Service’.
On investigation, it revealed that an agreement was entered into by the appellant with M/s. International Hotels Company Ltd. (IHCL, for short) dated 20.03.1984. In the said agreement, the appellant ganted licence to M/s.IHCL to run, conduct and operate the above three hotels together with all the related facilities and business appertaining thereto from the date of execution of the agreement. As per the agreement, the license was initially termed for 25 years. The licence fee fixed was equivalent to a percentage of the annual sales from the operation of the said three hotels.
It appeared to the department that the appellant is receiving rent from M/s.IHCL for renting out immovable property (hotels) to M/s.IHCL. Appellant had not discharged service tax for the period 01.06.2007 to 31.03.2011.
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