Hello, I recently entered into a business lease/rental agreement wherein my rent is a sum of Rs. 2,10,000 (2.1lacs) per month. Also, I (LESSEE) am to pay for electricity and other charges in respect to meter reading, etc.
Now, I've received an invoice from the landlord (LESSOR) for a total of 2,35,956, this being additional rs. 25956 for 12.36% service tax. My question is, am I required to pay this additional 25956 rupees, as there is no mention of this in the lease agreement, and I was never informed of such prior to signing lease. Also, in the lease it states the LESSOR "shall promptly pay during terms of lease, all the existing and future rates, municipal or other taxes, cess, assessments and outgoings in respect of the leased premises and the land on which it stands."
I don't believe the LESSOR is entitled to charge me an additional 25956 rupees, as I was never made aware of this *extra* charge, before receiving invoice a month later. I believe my rent payment should be 2.1lacs, as mentioned in the Lease Agreement.
Please advice, as now I am going thru a messy issue with landlord, as I had to terminate lease because of business (or lack thereof), and there are several months rent involved, and he is withholding my 21lacs (10 months) deposit.
(Also, the landlord has other tenants in his commercial building, so he is definitely over the 8.0 lacs credit limit).
Well, service tax has to be paid. The term of the contract is also against you, although you ca argue that the clause is with respect to future taxes- and not with respect to municipal and other taxes and not with respect to service tax. It is duty of the seller to inform the buyer as to what are the indirect taxes he will be charging from the buyer. A buyer is not aware of his tax liability, and not responsible for payment of any tax assesed by him.
In view of these, the agreement is vague- and liable to be discarded on this ground alone. Cancellation of agreement is the only way out. Examine that, if possible.
Thanks for your response - it's most helpful. Please clarify on following two points:
1) So, if the buyer, i.e. me as LESSEE, was never notified about this tax liability before entering Lease Agreement, then that may be grounds for fraudulant representation by the LESSOR in this Agreement dealing, or at least, because I was not made aware of my tax liability, I should not have to pay any more than my obligations in the Agreement/e.g. 2.1lacs rent?
2) Also, how much rent is the landlord/LESSOR allowed to deduct from my 21lacs security deposit, since I notified (in signed writing) my intentions to terminate the lease early (before the 3 years lease period), even though it does not explicitly say I can terminate lease early. I believe there would be a statute of limitation from the Rent Control Act, that says a LESSOR can only deduct up-to (say) 3 months rent, for non-payment of rents, when there is no provision in our Rental Agreement which states a specific PENALTY for early termination of agreement. For instance, he is not entitled to withhold 10 months rent (21lacs), because the lease is for 3 years, and I am terminating within the first year - basically, not paying any more rent and have vacated the premise already and handed over the keys to LESSOR. Also, as the lease was not Registered, are the general provisions on my side, to be able to recover my entire security deposit (minus maximum penalizable fees - say 3 months, as well as any fees due to damage/cleanup, etc.). Please give me an indication of my rights to pursue a Case / Complaint if the landlord refuses to acknowledge/return the appropriate amount of security deposit.
It is the responsibility of the service provider (land lord) to pay service tax to the Govt. Whether landlord can back-charge you, depends on the lease agreement.,
Landlord can say, since this is a statutory liability, no special mention is required in the agreement.,
Landlord can help you in one way,- he can consider income received from you Rs.2 lakhs as rent income inclusive of serivce tax and back-work service tax portion (ie.Rs.2 lakhs/112.36%*12.36%) and remit service tax accordingly. you may negotiate to bear a portion of such amount, since the agreement is vague and benefit of doubt should be given to you.
what about how many months rent he can withold leagally. Can he just arbitrarily charge me, say 3-5 additional months rent after I notified him and vacated / handed over keys, in order to claim most of my security deposit? I don't think this would be fair, and there should be some Governance / law in this regard - (see my question #2 above - I'd like to see know how much he can rightfully deduct add'l months rent, after I vacated), before I go do final negotiations for my security deposit back.
Also, I signed a MOU before the Agreement, which stated the rent at 56rupees sq.ft., inclusive of general maintenance - this works out to 2.1lacs (56 * 3762 sq.ft.), so I believe he is not being honest, and just trying to "overcharge me" unawares, after the agreement was signed / concluded.
Please appreciate if additional experts can give their opinion on this too - Do I have a valid claim that charging me 2.36lacs monthly rent, After the Fact of Signing, instead of 2.1lacs is unfair / misleading, and also, what is the maximum months rent he can claim of my deposit, after I vacated. I think I'm just "being taken for a ride", and plan to file suit.