Service Tax on Rent

Service Tax on Rent

In a recent judgment, Home Solutions Retails (I) Ltd. Vs. UOI & Others, delivered on 23.09.2011, the Hon'ble Delhi High Court has overruled an earlier judgment of it's division bench and decided that the service tax on rent of immovable properties for business or commerce purposes is intra vires the Constitution of India.

The Hon’ble High Court has validated the retrospective amendment as to imposition of service tax in such cases.

So, the effect of the judgment seems to be that from 1st June 2007 service providers of renting of immovable property exceeding Rs. 10 Lacs p.a. need to register under service tax act, collect service tax @ 10.3%, deposit the same and file returns.

Brijesh Baranwal

Practicing Chartered Accountant

Note:

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