The service tax is dealt with the finance act and is the levy which is not having own act. The task of administartion is entrusted tothe Central Board of Excise and Cutoms.When the service tax imposition was first ever started in India no body have thought that so many services would be brought under the net of service tax. Now even more than 100 services are there coming under the tax net. The most debatable service tax levy is on Renting of immovable property.
The section 65(105)(zzzz) of the finance act deals with the provision of renting of immovable service. Before tha budget of 2010 the situation was bit clear that the service in relation to the renting of immovable property is service but not the renting per se. The language of the clause is reproduced below:
" to any person, by any other person in relation to renting of immovable property for use in the course or furtherence of business or commerce"
from the above it is very much clear that only the service in relation to renting of immovable property is service.
But the amendment in budget 2010 was not imagined by any one. There was a retrospective amendment w.e.f june 2007 brought in the clause zzzz as follow:
"to any person, by any person,by renting of immovable property or any other service in relation to such renting , for use in the course of or, for furtherence of,business or commerce"
This amendment has shocked everyone in the sense that the matter was disputed in various court of law on the ground of constitutional validity of the charging of Service tax on Immovable property. The litigation was pending before the courts. That too the amendment was given retrospective effect.
With the retrospective amendment introduced so, the effect of the various judgements of Delhi High Court and Bombay High Court was wiped out. All the controversies raised were silenced for once and for all.
The clear cut message given by the government that no one can fight with the Government coz they ave the power of retrospective amendment available with them. It is same in line with the Hindi Proverb "Paani Me Reh Kar magarmachh se Bair nahi kar sakte". Because the Goverment has amend the law which is pending before Apex court of the land without waiting for the outcome of the decision of the court.