Service Tax on Renting of Immovable Property : Retrospective amendment and constitutional validity : UPHELD

The Punjab and Haryana High Court has upheld the Constitutional validity and retrospective levy of service tax on renting of immovable property.

The levy of service tax on renting was challenged by Shubh Timb Steels Ltd, owning commercial property in Himachal Pradesh, on the issue of Constitutional validity and also validity of the retrospective amendment. On both these points, the court ruled in favour of the government. The court observed that it could not be held that renting of immovable property did not involve any service, as a service could only be in relation to property and not be renting of property. It said renting for commercial purposes is a service and has a value for a service receiver.