Applicability of service tax on Returnable Rental Advance
This query is : Resolved
CHANDRASEKAR
(Querist)
22 June 2009
Respected Sirs,
Please clarify whether service tax is applicable on Returnable rental Advance. If applicable the relevant provisions of Law and if No relevant case laws etc
Best Regards
A Chandrasekar
Please clarify whether service tax is applicable on Returnable rental Advance. If applicable the relevant provisions of Law and if No relevant case laws etc
Best Regards
A Chandrasekar
Sanjeev Jain
(Expert)
23 June 2009
See Service tax is levied on receipt basis as and when you receive any amount covered u/s 65(105) of Service Tax Law you will become liable to pay Service Tax on it.
But as per the recent Judgment given by Hon' able Delhi High Court in the Case of Home Solution Retail India Ltd V. UOI that Rental of property is not a value addition and hence no service tax can be levied and passed the order in favour of assessee. Do remember to collect Service Tax on Renting property b'coz neither Supreme Court upheld the judgment nor any amendment made in this regard by the Ministry of Finance.
As i go through your case i come to know that you have received Rental on returnable basis. service Tax is attracted as you collect the amount and can be adjusted in subsequent return in case you return the amount of Rent.
But as per the recent Judgment given by Hon' able Delhi High Court in the Case of Home Solution Retail India Ltd V. UOI that Rental of property is not a value addition and hence no service tax can be levied and passed the order in favour of assessee. Do remember to collect Service Tax on Renting property b'coz neither Supreme Court upheld the judgment nor any amendment made in this regard by the Ministry of Finance.
As i go through your case i come to know that you have received Rental on returnable basis. service Tax is attracted as you collect the amount and can be adjusted in subsequent return in case you return the amount of Rent.
CA Nitin Wadhwani
(Expert)
23 June 2009
Service Tax is not leviable.
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