Kerala HC invalidates service tax on luxury hotels

KOCHI: 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.