Ad-Free CAclubindia and daily updates on your mobile. Subscribe Now!

Service tax

riddhi (student) (746 Points)

04 July 2016

We are paying rent to the landlord which is exceeding the limit of Rs. 10 Lacs so do we need to register for service tax? We are paying service tax to them but have not registered for the same. Also, the limit of Rs. 10 Lacs is to be considered year to year basis? For Example: If the rent is Rs. 40000/- including service tax and deducting tds. So do we need to consider Rs. 40000*12 for the limit of Rs. 10 Lacs or we have to take the gross rent?

Reply
Follow
Share

6 Replies

Shubham Gupta (Business Consultants) (2077 Points)
Replied 04 July 2016

hello,

as you are saying that you are paying rent and landlord is charging service tax from you. it is the responsibilty of landlord to take registration under service tax and pay it and NOT YOU

Upgrade to CAclubindia Pro. Subscribe Now!

Mukesh Kumar (Accounts Manager) (1466 Points)
Replied 04 July 2016

DEAR RIDDHI SIR,

Mukesh Kumar (Accounts Manager) (1466 Points)
Replied 04 July 2016

DEAR RIDDHI SIR, GUPTA JI SAYS RIGHT BUT IF YOU WANT TO TAKE INPUTE CENVAT CREDIT OF SERVICE TAX , THAN YOU SHOULD TAKE REGISTRATION TO SERVICE TAX GOOD LUCK

riddhi (student) (746 Points)
Replied 04 July 2016

Thanks but my querry is still not fully answered. The landlord has registered for service tax and i got it that if we want to take the cenvat credit then we have to register else it is not required. but to calculate the limit of Rs. 10 Lacs which rent is to be considered? gross rent or the net rent i.e. after deducting tds and adding service tax. Also, the limit of Rs. 10 Laxs is to be considered every year ?

Shubham Gupta (Business Consultants) (2077 Points)
Replied 04 July 2016

you do not have to take registration under service tax based on the rent paid by you .

it should be taken based on the value of services rendered by you.

And regarding which value to be taken in case of rent for service tax value computation for registering under service tax ,

it should the value on which you charge service tax for

eg if rent is Rs 100

Service tax @ 15% Rs 15

Total Rs 115

net to be paid after TDS 115-11.5=113.5

VAlue of service will be Rs 100

Hope this was helpful

Pls Feel free to call

9968983550

Upgrade to CAclubindia Pro. Subscribe Now!

Mukesh Kumar (Accounts Manager) (1466 Points)
Replied 05 July 2016

DEAR RIDDHI SIR,

IF YOU DO NOT WANT TO TAKE INPUTE CREDIT OF SERVICE TAX THAN YOU NOT NEED TO REGISTRATION OF SERIVVICE TAX .

IF YOU LANDLORD CHARGE BILL WITH SERIVICE TAX AND SHOW SPERATALY SERIVCE TAX AMOUNT IN INOVOICI THAN YOU SHOULD DEDUCTE TDS ONLY ON RENT AMOUNT FOR EXAMPLE:

RENT CHARGE AMOUNT RS 100

ADD SERIVCE TAX AMT RS 15 ( @ 15%)

TOTAL INVOICE AMT TS 115 (100+15)

AS ABOVE SAID FORMAT OF INVOICE YOU SHOULD DEDUTE TDS ONLY RENT CHARGE AMOUNT ( RS100) AND THAN PAY BALANCE AMOUNT

BUT IF YOUR LANDLORD DO NOT SHOW SERVICE TAX SEPRATALY IN INVOICE FOR EXAMPLE

RENT CHARGE RS 115

THAN YOU SHOULD DEDUTE TDS ON AMOUNT RS 115

GOOD LUCK