Service tax on Renting of Immovable Property

Say an assessee X, has been issued a notice for non charging of service tax with retrospective effect from June 2007 and the notice also includes non-registation, interest, penalty and non filing of returns, and the concerned service being renting of immovable properties. Can the assesse defend himself saying there is an ambiguity in the levy itself plus a stay ordered till Jan 2011 which deprives the provisions of interest and penalty?

Replies (3)

more actual details required to discuss the legal aspects, such topics can't be replied on "say/guess" basis

K...to b specific...d assessee didnt kno about the introduction of such a sec n didnt charge service tax, neither did he register nor paid d tax. In yr 2009 dept. Sent a notice asking for a sum as service tax...at dis pt d assessed regd n paid d amt demanded. But later again failed to pay. Now d dept sends a notice asking for st, interest, penalty for non reg, penalty intention to avoid tax, non filing of returns. Coming to my question can the assessee defend himself wid the provision under interest n penalties which says int n penalty can b waived in cases where d chargebility is ambiguous?

The levy has been full of legal tangles and courts have held either way. It can be said without doubt that the matter is unclear and tenants are/ were not willing therefore there cannot be any mala fide intention. Consequently demands if any should not exceed 1 year from the date of the notice.

Therefore the choices available are: pay ST under protest with interest for the past year and going forward and litigate for the past demand; alternative if client ius willing to avail the credit of the ST, pay under protest the entire amount with interest and lititgate the matter. In case of favourable decision claim the interest as refund; another alternative is that since the matter has not reached finality do not pay- litigate till matter clear. 

There is also a need to pay the interest as there is no provision to avoid the same. However penalty can be contested.

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