The Supreme Court has referred to 9-Judge Bench the issue of the
constitutional validity of GST on lease/rent payments in terms of Para 2
and Para 5(a) of Schedule II to the Central Goods and Services Tax Act, 2017 and the Goa Goods and Services Tax Act, 2017.
A division bench of Justice M.R. Shah and Justice Sanjay Karol tagged the SLP in the matter of Myrayash Hotels Pvt. Ltd. vs Union of India with a civil appeal that is pending before the 9-Judge bench.
The contention is that under Article 246A of the Constitution of India, GST can be levied only on “goods and services” and since leasing and renting don't fall in the category of services, the same cannot be levied on their payment.
On this premises, it has been averred that only State Government is empowered to tax transactions relating to the immovable property under Entry 49 List II of the Seventh Schedule of the Constitution of India, and therefore leaving of same under Article 246A is unlawful.
The Bombay High Court has ruled that Service Tax was enacted under the residuary power of legislation and the ambit is such 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.
Aggrieved, the petitioner filed an SLP against the above ruling and also challenged the constitutional validity of the levy of GST on lease/rent payments.
The Top Court has not granted any stay on the status quo of filing of GST on such payments and allowed the Department to continue until the order comes.
CASE TITLE: Myrayash Hotels Pvt. Ltd. vs Union of India
CASE DETAILS: Petition(s) for Special Leave to Appeal (C) No(s). 6080/2022
CORAM: Hon'ble Mr. Justice M.R. Shah and Hon'ble Mr. Justice Sanjay Karol
Advocates for Petitioner: Mr. Kavin Gulati, Sr. Adv. Mr. Ishaan Patkar, Adv. Mr. Avi Tandon, Adv. Mr. Arnav Narain, AOR
Advocates for Respondent: Mr. N. Venkataraman, A.S.G.
Mr. Arijit Prasad, Sr. Adv. Ms. Rukhmani Bobde, Adv. Mr. V.C.Bharathi,
Adv. Mr. Raghav Sharma, Adv. Mr. Vijaynand Tripathi, Adv. Mr. Vivasvan
Gautam, Adv. Mr. Mukesh Kumar Maroria, AOR
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