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Is service tax applicable on renting residential house ???

ankit (student) (127 Points)

07 June 2016

Hello everyone,

one of my client is earning rental income of Rs.800000/- from renting residential house property and Rs.400000/- from renting shop/commercial property.

My qery :

Is service tax applicable in this case and if yes then on what amount i.e. on Rs.8 lacs or Rs. 4 lacs ???

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7 Replies

Rahul Verma (CA-Final) (484 Points)
Replied 07 June 2016

As per the provision of Service tax

1) if residential dwelling is rented and use for residentail purpose then the same is not liable to service tax.

2) if same is rented for other then residential then liable for service tax.

3) for levying service tax, consideration of Rs 10 L atleast should be in preceding FY. And Registration is required if exceeds 9L.

K Eswarachari (Assistant Audit Officer) (42 Points)
Replied 07 June 2016

a private ltd. company has its head office in India and branch office in India as well as in foreign countries. Whether service tax is payable on rent paid for its foreign branch office? The company is having centralised registration at its head office.

ankit (student) (127 Points)
Replied 07 June 2016

so service tax will be charged on Rs.400000/- and for determing exemption limit of Rs.10 lacs whether 8 lacs for renting of house shall be considered or not ?

Pratibha Goyal (1 Points)
Replied 07 June 2016

no 8 lacs for renting house will not be considered while determining SSP limit

CHANCHAL JAIN (Partner) (34 Points)
Replied 08 June 2016

Dear Ankit,

Agreed with Pratibha.

Explanation given in explanation- point B of notification no. 33/2012,

“aggregate value” means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66B of the said Finance Act under any other notification.”

Do not consider exempt services' value while calculating turnover to claim exemption to small service provider.

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Rahul Panwar (nothing) (123 Points)
Replied 08 June 2016

for house located in foreign, we have to apply rule 5 POP, as per rule 5, pOP will be location of house i.e outside so same will not be taxable. But service reciever & SP both are in taxable territory, POP will be location of SR i.e rule 8. As per rule 14, there is more one applicable in determination of POP. later rule will be applied so we have to apply the rule 8. and Service will be payable

karan jit singh (Consultant) (1299 Points)
Replied 10 June 2016

Originally posted by : ankit
	Hello everyone, one of my client is earning rental income of Rs.800000/- from renting residential house property and Rs.400000/- from renting shop/commercial property. My qery : Is service tax applicable in this case and if yes then on what amount i.e. on Rs.8 lacs or Rs. 4 lacs ???

If residential house for residential purpose then exempt from Service Tax and Rent from commercial property covered under Tax free threshhold. Thus no ST leviable. Take a chillpil brother.

Regards

Karanjit Singh | | +91-7503588224

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