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Case Law Details

Case Name : Home Solution Retail India Ltd Vs UOI & ORS (Delhi High Court)
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The Delhi High Court held that the renting of immovable property is not a service, and accordingly, the levy of service tax on the activity of renting is “ultra vires.” The decision may have significant accounting implications on the entities.

The judgment delivered by the Division Bench of the Delhi High Court in the case of Home Solution Retail India Ltd. & Ors Vs Union of India (UOI) & Ors may have significant financial reporting implications. This article analyzes the key aspects of the court decision and its k

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4 Comments

  1. lata chauhan says:

    have leased/rented my hotel in uttrakhand .there are two seperate agreements 1 ) lease of land and building 20 hire of plant and machinery and furniture and fixtures.
    I believe that the Hotel.that immovable properties exempt from service taxes are residential properties,residential accommodation such as hotel etc.Please confirm this fact and if there is any circular /notification to that effect.
    Wis there any Service Tax on plant and Machinery?
    Thanks,
    Lata chauhan

  2. fgghgh says:

    Furhter, since there is a documentary evidence i.e. refund claim application acknowledged by the jurisdictional authority and Honorable Supreme Court has not given stay against the said order of Honorable High Court (It is settled law that mere admittance of SLP by SC does not cease operation of order of HC), it satisfy the “virtual certainty” criterion for the recognition of the contingent asset under AS29.

    Kuman Vaghasiya

    Read more: https://www.taxguru.in/service-tax/update-on-the-delhi-high-court-decision-regarding-applicability-of-service-tax-on-rent.html/comment-page-1#comment-85910#ixzz0v4U6jfry

  3. Kuman says:

    i have a different view for requirement of providing contigent assets in the balance sheet.

    We all know that even recipient of service can file claim for refund of service tax borne by them u/s 11B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 with their jurisdictional authority. When assessee (as a lessee and recipient of service) have filed their claim for refund of service tax paid to lessor on “renting of immovable property” and borne by them in light of honorable Delhi High Court order, the provision of said refund amount has to be made as “refund receivable (contigent assets)” in the balance sheet, otherwise said refund claim will hit by the provision of “unjust enrichment” u/s 11B of the Central Excise Act, 1944 and even if refund sanctioned, the same would be tranfered to consumer welfare fund.

    Furhter, since there is a documentary evidence i.e. refund claim application acknowledged by the jurisdictional authority and Honorable Supreme Court has not given stay against the said order of Honorable High Court (It is settled law that mere admittance of SLP by SC does not cease operation of order of HC), it satisfy the “virtual certainty” criterion for the recognition of the contingent asset under AS29.

    Kuman Vaghasiya

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