Live Course on Drafting of Appeal and Reply of Penalty Notice by CA Sachin Sinha. Register Now!!

Service tax on subletting for residential purpose...?

nishil saluja (student) (72 Points)

09 June 2011

Hello,

I m little confused in classifiying of the following transaction under taxable service.

suppose X makes an lease aggreement with an owner of a house and subsequently give it on rent for residental purpose .Then is the transaction is taxable if

a) he is an individual?

b) he is a pvt. ltd. company?

and under which taxable service.

Reply
Follow
Share

13 Replies

rachit jain (chartered accountant ) (635 Points)
Replied 09 June 2011

in both the cases service tax will be only applicable if taxable service provided in the financial year Rs.1000000.

it is taxable under sec 65(105)(zzzz) as renting on immovable property.

rachit jain (chartered accountant ) (635 Points)
Replied 09 June 2011

but service tax is not applicable if it is solely used for residential purposes

nishil saluja (student) (72 Points)
Replied 09 June 2011

I have a little more doubt...

Is the transaction can't be taxable under real estate agent's services

nishil saluja (student) (72 Points)
Replied 09 June 2011

I have a little more doubt...

Is the transaction can't be taxable under real estate agent's services

Prasad (Sr. Manager) (617 Points)
Replied 09 June 2011

Nishil The services are classified under 65 105 (zzzz). to answer your question building used for residential purpose are not covered under this section.

Prasad (Sr. Manager) (617 Points)
Replied 09 June 2011

you can refer Mr. Hiregange article on this subject /articles/renting-of-immovable-property-service-8472.asp

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 09 June 2011

for X the taking building on lease and subsequent rent the same in commercial transaction, original landlord is not subject to ST, but X is under the servicetax net.

rachit jain (chartered accountant ) (635 Points)
Replied 09 June 2011

real estate agent is the person who is engaged in the business of sale, purchase, leasing or renting of real estate. merely a single transaction will not make him a real estate agent therefor i thing it will not be chargable under real estate agent's service.

nishil saluja (student) (72 Points)
Replied 09 June 2011

Thanks everyone for their reply....

nishil saluja (student) (72 Points)
Replied 09 June 2011

i would like to ask something more that if in the given situation the company is doing the transaction as its business.....then is service tax chargeable...

Prasad (Sr. Manager) (617 Points)
Replied 09 June 2011

If it is for commercial purposes it is taxable

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 09 June 2011

Originally posted by : U S Sharma
	for X the taking building on lease and subsequent rent the same in commercial transaction, original landlord is not subject to ST, but X is under the servicetax net.