The Hindu : Business : Service tax on rental income: Centre moves apex court

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Tuesday, Aug 19, 2008
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Service tax on rental income: Centre moves apex court

The Centre has sought transfer of petitions pending before the High Courts

NEW DELHI: The Centre on Monday sought Supreme Court’s intervention in deciding the constitutional validity of the Finance Act, 2007, that empowers the government to impose service tax on rental income from commercial property.

A bench headed by Justice B. N. Agrawal while seeking reply from the Retailers Association of India, the Confederation of Real Estate Developers’ Associations of India and the Multiplex Association of India on the transfer petition filed by the Centre also stayed proceedings before various high courts. The Centre through the Department of Revenue has sought transfer of petitions pending before the High Courts of Bombay, Madras, Kolkata, Punjab and Haryana and Kerala on the ground that there was a likelihood of conflicting decisions.

According to the petition, retailers, real estate developers and multiplex owners had filed writ petitions before various High Courts challenging the levy of service tax on leasing, letting, renting or any other similar arrangement in respect of immovable property for use in furtherance of business or commerce.

It further said that they had challenged the constitutional validity of the Finance Act, 2007, on the ground that it was beyond the legislative competence of the Union and, thus, Parliament cannot levy such a tax. — PTI

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