Service Tax on Renting of Immovable Property

Originally posted by : Govind Sharan FCA
	Whether Central Government can impose service tax on renting of immovable property by amending Finance Bill. No. According to me Service Tax is still not applicable on renting of immovable property. if you are not providing any other service related to renting. Govind Sharan Agarwal FCA

 In my view "pure rent" is not a service at all. There is no value add in the activity. [ handing over the key cannot be said to be service] Further renting of IP is a state subject .Only services in realtion to renting could be called a service. Large amount of litigation expected in the coming years on this as well as the construction services.

Dear Friends

We have not collected service tax on Renting of immovable property services by relying on the Judgment of Delhi high court dated 18th April 2009 in the case of Home Solution Retail India Ltd. & Others v/s. UOI & Others 2009-TIOL-196-HC-DEL-ST. As per recent budget the “Rental” becomes taxable under Service tax from July 2007 onwards.

Now we are starting to collect Service tax from our party. But my query is, shall I adjust this service tax liability against available cenvat credit balance. Pls. Reply.

On which services you have taken cenvat is the issue, whether they relate to renting of immovable property or not. You can call on 01204045143.

Govind Sharan Agarwal

FCA

Dear Sir

We have taken Cenvat  credit from Construction cost of said premises. The same premises we had given on rental basis since April 2009. Pls. Reply. Thanks.

Pragnesh

ICWAI     

One of my client is undertaking works contract to erect new plant & Machineries. Some orders will be purely labour only and some orders will be with material. Whether my client have to pay any service tax for above. If service tax is applicable, please clarify that there is any abatement in this service. Please clarify the basic limit 10 lakhs will be applicable or not