Rajinikanth received a major relief after the Customs, Excise and Service Tax Appellate Tribunal in Chennai recently set aside a service tax demand against him. The CESTAT ruled that renting a building for use as a hotel is specifically excluded from the ambit of taxable services.

About the case

The case arose from a dispute over the lease of a multistorey building, Raghavendra Mandapam, to Vasantha Bhavan Hotels India Pvt. Ltd. by Rajinikanth. The revenue authorities had demanded service tax totalling approximately Rs 56.8 lakh for the period between June 2007 and June 2012. They argued that the property was used for commercial purposes, including a restaurant, banquet hall, and health club.