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December 2015

Service tax is leviable on all lease rent whether of short tenure or of more than 90 years. The service provided by assesse is not sovereign service and no statutory fees are levied on the same, thus it is a taxable service.

By Puloma Dalal
Jayesh Gogri
Mandar Telang, Chartered Accountants
Reading Time 1 mins
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32. 2015 (40) STR 95 (All.) Greater Noida Industrial Dev. Authority vs. Comm. Of C., C. Ex.

Service tax is leviable on all lease rent whether of short tenure or of more than 90 years. The service provided by assesse is not sovereign service and no statutory fees are levied on the same, thus it is a taxable service.

Facts

The appellant took plots on long term lease for construction of commercial and business premises. The Tribunal held against the Appellant holding that the nature of lease, whether short term or perpetuity, did not make any difference to meaning of expression “leasing of immovable property” and also, the Act did not make any difference between a juristic person and an individual and therefore, the leasing of land was liable for service tax irrespective of the tenure. Aggrieved by the same, the present appeal is filed.

Held

The High Court upheld the Tribunal decision and confirmed that leasing of land for business/commercial purpose was taxable event and such amount charged was leviable under service tax under “leasing/renting of immovable property”.

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