As per the latest judgment of the Kerla High Court the imposition of Service Tax on AC restaurants has been declared unconstitutional. Imposition of service tax on luxury hotels unconstitutional: Kerala HC 04 Jul 20130 Comments. The Kerala High Court today declared as "unconstitutional" the imposition of service tax on luxury hotels by the Centre by amending the Finance Act.
A single bench of Justice A M Shafique passed the order while allowing a batch of petitions filed by the Kerala Classified Hotels and Restaurants Association, challenging the imposition of service tax.
The court said that the imposition of service tax by the Centre by amending the Finance Act was beyond the legal competency of Parliament as the subject comes under the state.
It also said that if any payment was made by the petitioners on the basis of amendment to Finance Act, they were entitled for a refund.
Imposition of additional service tax of 4.9% by the Union on air-conditioned (AC) restaurants, however, have already increased prices in 90% of the restaurants and the remaining are likely to do the same in the coming week suggested a report by Times of India.
A single bench of Justice A M Shafique passed the order while allowing a batch of petitions filed by the Kerala Classified Hotels and Restaurants Association, challenging the imposition of service tax.
The court said that the imposition of service tax by the Centre by amending the Finance Act was beyond the legal competency of Parliament as the subject comes under the state.
It also said that if any payment was made by the petitioners on the basis of amendment to Finance Act, they were entitled for a refund.
Imposition of additional service tax of 4.9% by the Union on air-conditioned (AC) restaurants, however, have already increased prices in 90% of the restaurants and the remaining are likely to do the same in the coming week suggested a report by Times of India.
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