CHENNAI: The Service Tax Appellate Tribunal in Chennai has ruled in favour of actor Rajinikanth in a case related to service tax on a building he had leased to the Vasantha Bhavan hotel in Kodambakkam, as reported by Daily Thanthi.
The Service Tax Department had directed Rajinikanth to pay Rs 56.84 lakh as service tax for the period between 2007 and 2012 for the building on Kodambakkam Road. Challenging the order, he filed an appeal before the tribunal in 2016.
The matter was heard by a bench comprising Technical Member M Ajit Kumar and Judicial Member TV Ajayan.
Rajinikanth’s counsel T T Ravichandran argued that under the Finance Act, 1994, buildings rented out for hotels are exempt from service tax and the department’s order was therefore invalid.
Opposing the plea, the department’s counsel Reena contended that the presence of facilities such as a restaurant, conference hall, club and bar meant the exemption should not apply.
After hearing both sides, the tribunal held that facilities such as restaurants within a hotel operate for the convenience of guests and form part of the hotel itself, and cannot be treated as separate entities.
The tribunal subsequently set aside the service tax demand issued against Rajinikanth.