Pinakin (Finance Executive) (44 Points)
16 November 2011Our company (primarily a trading company of Language Books) owns a double Flat in Bandra, Mumbai which is unused. Recently we have given it on rent to a family. Do we come under the category of Service Tax, and do we have to charge Tenant an additional service tax (they might not agree to it)
I have read on site that there is a kind of dispute under Bombay High Court that Rent shouldn't be coming in the service tax category
Please guide me on this,
Thanks
Pinakin Balsara
CA Sripal Jain
(Associate Finance)
(709 Points)
Replied 16 November 2011
hello.
the finance act 2010 have nullified the judgemnt given by the high court .now the act have made very clear tht one have to charge service tax on rent
regards
sripal jain
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 17 November 2011
Renting for residential purpose is not taxable.
CA Sripal Jain
(Associate Finance)
(709 Points)
Replied 22 November 2011
Renting of immovable property for residential purpose is not liable to service tax. Whereas renting of immovable property for furtherance of business is taxable.
In case intention of landlord is to give the property for residential purpose but the same is misused by tenant, though service tax is not leviable but landlord must take appropriate steps to escape from the purview of service tax as well as mischief of stamp duty.
CAclubindia
