Rajinikanth gets relief in tax case; the tribunal cancels service tax demand over the 'Jailer 2' actor's Chennai property lease

Veteran actor Rajinikanth has received major relief in a long-running service tax dispute related to a commercial property he owns in Chennai. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) cancelled an order issued by the service tax department that directed the actor to pay tax for a building he had leased out. The property, located on Kodambakkam High Road, had been rented to the well-known restaurant chain Vasantha Bhavan for running a hotel. Earlier, the department had demanded Rs 56.84 lakh as service tax for the five years between 2007 and 2012.As reported by News18, Rajinikanth had challenged the tax order by filing an appeal in 2016 before the Service Tax Appellate Tribunal in Nandanam, Chennai. The adjudication was made by technical member M. Ajit Kumar and a member from the judiciary, V. Ajayan. The tribunal determined whether the actor must pay service tax for leasing the property to a hotel or whether the property qualifies for exemption under the provisions of the Finance Act. The report further mentioned that during the court proceeding, D. T. Ravichandran, who represented Rajinikanth, argued that the premises were leased exclusively for commencing hotel operations. Under the Finance Act of 1994, properties rented out for hotel purposes are eligible for service tax exemption. However, the service tax department’s counsel, O. M. Reena, opposed this argument. She stated that since the hotel complex also housed facilities such as a restaurant, conference hall, club, and bar, the property should not receive full tax exemption.After considering the arguments from both sides, the tribunal ruled in favor of Rajinikanth. The bench observed that facilities like restaurants and conference halls functioning inside a hotel are meant primarily for the convenience of guests staying there, report mentions. Hence, these facilities cannot be treated as separate commercial establishments. Since they form an integral part of the hotel operations, the property qualifies for service tax exemption. Based on this reasoning, the tribunal cancelled the earlier order and ruled that Rajinikanth was not required to pay the demanded service tax.Rajinikanth will next be seen on the big screen in 'Jailer 2,' which aims for a release in the second half of this year. The superstar actor has also announced 'Thalaivar 173' with Cibi Chakravarthy and his reunion with Kamal Haasan, which Nelson Dilipkumar will helm.Disclaimer: This article is for informational purposes only and does not constitute legal advice regarding personality rights or ongoing judicial proceedings.