10 February 2016
One of our client is running Paying guest house for working employees. He is paying 50000Rs. rent to Land lord. he is also providing tv and furniture fecility, and food. what is the service tax applicability Please give me answer with detail. How to rise the bills for PG client.
12 February 2016
The services rendered by your clients are taxable. Registration for Service Tax will be essential.
Your query has not clarified whether the landlord who collects Rs.50,000/- rent levies service tax or not. If I understand correctly, your client then uses the premises, providing TV, furniture and fooding to his PG clients for which he charges monthly rent.
These services are covered under Accommodation Renting Services in Hotels, Camps and Inns. These services have a 30% abatement. It is assumed that there is at least one PG paying more than Rs.1,000/- per month - else the service is covered under the Negative List. Therefore if the PG pays Rs.5,000/- per month then the following duty should be collected from him: Services Rendered Rs.5,000 Less: Abatement @ 30% Rs.1,500 Taxable Service Rs.3,500 Add: Service Tax @14% Rs. 490 Add: SBC @ 0.5% Rs. 18 (Rounded Off) Total Payable Rs.5,508/-
Your invoice to PGs would be as under: Rent for the month of February Rs.5,000 Add: Service Tax @ 9.80% Rs. 490 Add.Swatch Bharat Cess Rs. 18 Total Amount Due Rs.5,508/-
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