Service Tax: "Renting of Immovable Property" service(rental of ware-house) provided during 01.06.2007 to 31.03.2011: Penalty: Scope and liability: As per the Explanations to Section 65 (105) (zzzz), land appurtenant to building would be immovable property. Only if vacant land exists as it is without any building, the exclusion clause would apply. The fact that the area of the land appurtenant to the building being more than the area of the building would not make any difference. Therefore, the demand of service tax in respect of the land and building rented to M/s. Reliance Industries Ltd. is prima facie, sustainable in law. As regards the land and building rented out to M/s. Avinash Automobiles Pvt. Ltd., the premises leased out consisted of a factory building and vacant land with a common compound wall and security gate. The appellant has not been able to lead any evidence to the contrary nor did they furnish any evidence of the alleged construction on the vacant land subsequent to the lease agreement. Therefore, the consideration received for both the land and building would be leviable to service tax under the category of "Renting of Immovable Property Service". (Para 5.2, 5.3).

Penalty: The plea of the appellant is that they were under the bona fide belief that renting of immovable property is not a service and therefore, they were not required to discharge service tax liability on the vacant land which has been leased out by them. Hon'ble High Court of Delhi in the case of Home Solutions Retail (India) Ltd. Vs. Union of India STO 2009 Del 1851 taken a view that renting cannot be treated as a taxable service, however, the decision of the Hon'ble High Court of Delhi was subsequently over-ruled by the Full Bench of the Hon'ble High Court of Delhi reported in STO 2011 Del 468. The law was amended by the Finance Act, 2010 deeming renting of immovable property as a taxable service since 01.06.2007 which was also upheld by the Hon'ble High Court of Delhi in the above decision. In view of these judicial pronouncements, there is no doubt that the activity undertaken by the appellant is a taxable service with effect from 01.06.2007. Further, in the Finance Act, 2012, a provision was made for waiver of penalty in case a service provider discharged the service tax liability along with interest in respect of renting of immovable property service within a stipulated time limit. But, the appellant did not exercise their option for availing this facility. Having failed to avail of the opportunity, the contention for waiver of penalty is not acceptable. Hence, the appellant has not made out any case for waiver of pre-deposit of the duty adjudged and penalty.(Para 5.4)

Pre-deposit ordered.

Renting of Immovable Property: Prior to 01.07.2010 renting of vacant land is not covered under RIP service.

Renting of Immovable Property: Demand: Stay: Part of the property is given on rent by the appellant to various persons and collecting the rent: Such an activity would fall under the category of renting of immovable property services: Directions issued for partial pre deposit.

Renting of Immovable Property: Stay: On the basis of Delhi High Court judgment holding that service tax was not leviable on income of rent from immovable property: Larger period cannot be invoked: Waiver from stay granted.

Renting of Immovable Property: Appellants deposited 50% in cash and bank guarantee for 50% in terms of judgment of Honorable Supreme Court in Home Solutions: Pre deposit for balance amounts waived.

Renting of Immovable Property: Demand: Stay: Property jointly owned: Rent received individually: Threshold exemption of Rs.10 lakhs as per Notification No. 6/2005-ST, dated 1-3-2005 admissible and demand remains within threshold: Waiver from pre deposit granted.

Business Support Service: Renting of Immovable Property: prima facie the charges collected by the appellant from its licensee are in the nature of rent: Pre deposit waived.

Renting of Immovable Property: Stay: 50% of the disputed Service Tax liability was deposited by M/s Future Value Retail Ltd and M/s Pantaloon Retail (India) Ltd - both of Future Group Venture and balance 50% amount has been deposited by the appellant : Stay granted.

Renting of Immovable Property: Valuation: Whether notional interest on interest free deposit taken for renting of property is includible in the taxable value: Prima facie there is no question of any notional interest as it is a general practice prevailing in the country to take interest free deposit at the time of giving immovable property on rent for commercial or residential purpose. 

Banking Service: Renting of Immovable Property: Banks took action under SARFESI Act and factories of defaulter taken over and leased out: Activity falls under RIP service: Service tax already paid: Stay granted from balance amounts.

Renting of Immovable Property: Commercial concern: Renting out of premises to Bank, BSNL and Post Office amounts to renting of property for use in course of furtherance of business or commerce: Bank and BSNL are commercial organizations: Renting of premises to Post Office: Matter needs to be considered after examining the provisions of the Indian Post Act: Matter remanded.

Renting of Immovable Property: Joint lease: SSI exemption: Notification talks about the aggregate value of the taxable services rendered, should be considered for the purpose of exemption and in this case if individually all the appellants be considered as provider, of such service, their aggregate value does not exceed the threshold limit: Stay granted.

Renting of Immovable Property Service: Joint Ownership of property rented out: Department considers the entire property belonging to one person: Even individual value is below threshold exemption limit: Stay granted.

Renting of Immovable Property: Electricity meters installed in all the premises rented out and electricity charges collected from the tenants: Electricity being ‘goods’ value not includible as per Notification No. 12/2003 - S.T dated 20.06.2003: Waiver granted from pre deposit.

Renting of Immovable Property: Service Tax and interest paid: Amendment in budget of 2012 waived imposition of penalty.

Renting of Space: Demand: Stay: Appellants contention that advertiser has included the value of this service and already paid service tax, they have only rented the space: Stay granted.

Renting of Immovable Property: Lease agreement includes providing land, plant and machinery: Appellants also receiving lease money apart from consideration for doing job work on behalf of Diageo: Directions for pre deposit issued. 

Renting of Immovable Property: Joint lease of property: SSI exemption considered on aggregate basis, if individual service provider is considered to have provided separate service, taxable value within SSI exemption: Stay granted.

Renting of Immovable Property: Property jointly leased out: Within SSI exemption: Stay granted.

Renting of Immovable Property: Penalty: As per section 80A if the outstanding service tax is paid along with interest, no penalty.

Renting of Immovable Property: Building rented for being used as hotel, inn, etc excluded from tax net: Stay granted based on earlier decision.

Renting of Immovable Property: Service tax with interest paid within 6 months of amendment brought by Budget of 2012: No penalty imposable.

Renting of Immovable Property: Joint Ownership: If the cheques for rent are received individually by all the appellants, it was indicated in the agreement between the individuals for the purpose of renting out of premises to another person so as to make it specific that individually they are renting out the property to a person.. If individually all the appellants be considered as provider of such service, their aggregate value does not exceed the threshold limit. Stay granted.

Renting of Immovable Property: Properties owned by different individuals leased under a single deed: Issue whether they would be eligible for threshold exemption individually: Stay granted as in similar matters it has been granted. 

Renting of Immovable Property: Property jointly leased out: SSI exemption prima facie found admissible to each individual owner: Stay granted. 

Renting of Immovable Property: Joint Ownership of property: Stay: Facts required to be examined at length: Directions for partial pre deposit issued.

Renting of Immovable Property: Appellants having rented hotel buildings: Immovable property does not include building used solely for residential purposes and buildings used for the purpose of accommodation including hotels, hostels, boarding houses, holiday accommodations, tents, camping facilities: Prima facie case made out: Stay granted.

Renting of Immovable Property: Demand: Stay: building used solely for residential purposes and buildings used for the purpose of accommodation including hotels, hostels, boarding houses, holiday accommodations, tents, camping facilities not included in the definition: Stay granted.

Renting of Immovable Property: Appellants receipt shown appears within threshold exemption limit: Matter remanded for reconsideration.

Renting of Immovable Property: Vacant land not covered: However, since vacant land was given for specific purpose: Partial stay granted.

Service Tax: Cenvat Credit: Construction and renting of immovable property: Pre-deposit: The arguments advanced and discussed above would show that the issue is of interpretation and also of admissibility of Service Tax paid on various services and require detailed consideration of the relevant rules as well as precedent decisions on the subject. Under these circumstances, the amount of approximately Rs.2 lakhs already deposited by the appellant is sufficient for the purpose of pre-deposit. (para 4,5)

Service Tax: Renting of Immovable Property: Retrospective Effect: Pending further orders in this application or in the writ petition, not to initiate any coercive steps for recovery of the service tax on the renting of immovable property by the petitioners, on the basis of the provisions of Section 65 (105) (zzzz) as amended by the Finance Act, 2010, for the period 01/06/2007 to 01/04/2010.

Service Tax: Renting of Immovable Property: Prospective Effect: Petitioner shall, however, be liable to pay the applicable service tax as per the provisions of Section 65 (105) (zzzz), for the period subsequent to 01/04/2010 but subject to the result of the writ petition, notice.

Service Tax: Renting of Immovable Property: No recovery of service tax in respect of renting of immovable property alone.

Service Tax: Renting of Immovable Property: Liability to pay Service Tax: It is made clear that in the event the writ petition is dismissed, the liability to pay service tax along with any other liability as a result of the demand made, will solely be that of the petitioner.

Service Tax: Renting of Immovable Property: Other service in relation to such renting: There is no challenge in this writ petition to the second part of the aforesaid provision, namely, “any other service in relation to such renting” and consequently, if there is any other such service, the service provider would be liable to pay service tax on such service and in respect of this portion of the provision there is no stay.

Renting of immovable property: Stay not granted by Apex Court - The judgment of this Court is challenged by filing the SLP, till date there is no order passed by the Supreme Court staying the operation of that judgment. In these circumstances, the respondent could not instruct their officers to peruse the matter with tax payers calling upon them to pay service tax or to resort to other means under the law to protect the Revenue. The manner in which the letters are written clearly indicate that the payment of tax is demanded and the threat is also extended that if there is no compliance, Department would initiate further necessary action against them. (para 8)

Mr. Chandhiok, learned ASG appearing for the respondent, assures that corrective steps shall be taken by issuing further instructions, in supersession of earlier instructions, to the officers not to write such letters demanding the payment of service tax or threatening coercive steps. On this assurance no further orders are required to be passed in this Writ Petition. Writ Petition is disposed of. Dasti. (para 9)

Renting Of Immovable Property: The renting of immovable property for use in the course or furtherance of business of commerce by itself does not entail any value addition and, therefore, cannot be regarded as a service.

Value Added Tax: Service Tax is a value added tax. It is a tax on value addition provided by a service provider. It is obvious that it must have connection with a service and, there must be some value addition by that service. If there is no value addition, then there is no service.

Services In Relation To : There is no dispute that any service connected with the renting of such immovable property would fall within the ambit of Section 65(105)(zzzz) and would be exigible to Service Tax.

Other service: Such as air conditioning service provided alongwith the renting of immovable property, then it would fall within Section 65(105)(zzzz).

Ultra Vires: Section 65(105)(zzzz) does not in terms entail that the renting out of immovable property for use in the course or furtherance of business of commerce would by itself constitute a taxable service and be exigible to service tax under the said Act. The obvious consequence of this finding is that the interpretation placed by the impugned notification and circular on the said provision is not correct. Consequently, the same are ultra vires the said Act and to the extent that they authorize the levy of service tax on renting of immovable property per se, they are set aside.