court has struck down the levy of service tax on commercial

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CA Suresh Choudhary (Querist)
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23 April 2009 On 21.04.2009, The Delhi high court has struck down the levy of service tax on commercial property rentals.
The high court’s order is applicable in the entire country with retrospective effect from the day the tax was levied on commercial property rentals.

Can any body clarify the applicability of the above high court order? I mean whether the service tax collected earlier for the same is to be refunded to the relevant party. And if yes what will an assessee had to do to collect/ Refund back the service tax paid to the government?

Best Regards
CA Suresh Choudhary

Dayal

Dayal (Expert)
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23 April 2009 Service provider has collected the tax and deposited with the government treasury, which means if the provider now intends to seek refund, he will have to issue credit note and refund the service tax amount to the lessee.

If no credit is passed on refund will not be granted and would get covered under unjust enrichment.

In the current scenario refund will not be granted, since there is time for department to appeal before the Hon’ble Supreme court, we never know the outcome. It is not possible to predict when the situation will arise, it may arise of may not arise also

Going forward the provider should be informed not to charge and if any bills are pending for payment, the same should be paid without service tax quoting the judgment

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