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2023 (11) TMI 166 - AT - Service TaxShort payment of service tax - Management Consultancy Service - non-payment of service tax on Renting of Immovable Property - Point of Taxation Rules, 2011 by Notification No. 18/2011-S.T., dated 1-3-11 which was further amended by Notification 25/2011-S.T., dated 31-3-11 - Time limitation - HELD THAT:- During the disputed period there is no clear provision in Finance Act, 1994 as to the date with reference to which rate of tax is applicable for calculating service tax. However, this lacuna was removed by Point of Taxation Rules, 2011 by Notification No. 18/2011-S.T., dated 1-3-11 which was further amended by Notification 25/2011-S.T., dated 31-3-11 - In the present disputed matter the appellant raised the invoice on 30.04.2009 and payment towards the services of “Management Consultancy Services” was also received in July 2009 when rate of service tax was @10%, therefore in our view appellant had rightly paid the service tax under the category of “Management Consultancy Services” at 10%. The rate of tax is applicable on the date when the appellant was liable for pay Service tax to the department. It is clear that the rule of POT is not applicable in a case where service was provided and invoice was issued prior to introduction of Point of Taxation Rules, 2011 - the impugned order confirming the differential service tax demand in respect of “Management Consultancy Service” is not sustainable. Time Limitation - HELD THAT:- Admittedly the tax liability on this particular tax entry has been a subject matter of substantial litigation. At the relevant time the chargeability of service tax on renting of immovable property was sub-judice before various judicial forum - In fact, the Hon’ble Delhi High Court in the case of HOME SOLUTIONS RETAILS (INDIA) LTD. VERSUS UNION OF INDIA & ORS [2011 (9) TMI 46 - DELHI HIGH COURT] held that the activity of the rent per se cannot be subjected to Service Tax levy, whereas the activities in relation to renting are liable to Service Tax. The decision of the Delhi High Court led to legislative changes including retrospective amendment of the concerned legal provisions in the Finance Act, 1994. The ingredients for invoking demand for extended period are not present in the present case. Accordingly, the demand raised on “Renting of Immovable Property” shall be restricted to normal period only - the impugned order is set aside. Appeal allowed.
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