Retailers get HC relief over service tax on rented propertie

CA. A. Kumar (Associate Consultant) (2362 Points)

02 August 2008  

The Bombay High Court has granted interim relief to members of Retail Association of India on levy of service tax on rented properties. A Division Bench of Justices D K Deshmukh and J P Devadhar gave order yesterday while hearing a petition from members challenging the constitutional validity of service tax on rented properties from where retailers operate. “The members have to file a written undertaking that in case their application against such tax was disallowed, they will pay the (pending) amount in accordance with the statutory provisions,`` the court observed. The court held that if such an undertaking was filed by the RAI members, no coercive steps would be taken to recover the tax. Members giving the undertaking cannot transfer interest in the said property without prior notice.