The Supreme Court of India has granted leave to appeal filed by Myrayash Hotels Pvt. Ltd. challenging the constitutional validity of the levy of GST on lease/rent payments. The petitioner argued that GST can only be levied on “goods and services” under Article 246A of the Constitution of India and that there is no “service” provided in a lease/rent agreement. The Bombay High Court held that Parliament has wide powers under the residuary power of legislation and that the assumption of Parliament that there is a service element in the lease of land cannot be challenged as long as the tax does not come within List II of the Seventh Schedule. The Supreme Court has directed the appeal to be listed before the Constitution Bench of 9 of the Supreme Court of India and tagged it with Civil Appeal No. 4487 of 2010. The bench clarified that there is no stay against the recovery of tax and it will be open for the Revenue to recover the tax in accordance with the law.
Source a2ztaxcorp
