Rajinikanth Triumphs in Service Tax Case Over Chennai Building Lease

The Customs, Excise and Service Tax Appellate Tribunal has overturned a service tax claim against actor Rajinikanth related to the lease of his building, Raghavendra Mandapam, to a hotel in Chennai. The tribunal deemed that such leases are excluded from taxable services under the Finance Act.

The Customs, Excise and Service Tax Appellate Tribunal in Chennai has overturned a Rs 56.8 lakh service tax demand against actor Rajinikanth. The demand stemmed from Rajinikanth's lease of his building, Raghavendra Mandapam, to Vasantha Bhavan Hotels India Pvt. Ltd.

The tribunal ruled that leasing buildings for hotel purposes falls outside the scope of taxable services as per Section 65(105)(zzzz) of the Finance Act. Facilities like restaurants and conference halls within the building were deemed integral to hotel operations, not separate commercial uses.

This decision aligns with previous rulings from coordinate benches and the Supreme Court, emphasizing that immovable property used by hotels was intended by lawmakers to be excluded from taxation. The tribunal also ordered a refund of pre-deposits made by Rajinikanth during the appeal process.

(With inputs from agencies.)