Payment of one-time premium was not chargeable to tax under Service Tax under Renting of Immovable property

Last updated: 28 November 2022

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The Ahmedabad CESTAT tribunal ruled that a one-time premium paid for a 30-year lease of immovable property is not subject to Service Tax. The tribunal distinguished between a premium, which is the price for obtaining the lease, and rent, which is for the use and occupation of the property. Service Tax is only leviable on the rental component, not the initial premium.

Court :
CESTAT bench of Ahmedabad

Brief :
The CESTAT bench of Ahmedabad ("the Tribunal") in the case of Gujarat Power Corporation Ltd. v C.C.E. & ST(Service Tax Appeal No. 10193 of 2017)dated November 18, 2022 held that payment of one-time premium under renting of immovable property services is not chargeable to Service Tax.

Citation :
Service Tax Appeal No. 10193 of 2017

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1 Year PLAN

1999

(Excl. of GST ₹359)

BEST VALUE

2 Years PLAN

3499

(Excl. of GST ₹629)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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