Is service tax applicable

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manoj rathod (Querist)

26 October 2011 dear sir,

we are agro base proprietory concern(pulses milling),we have one our own factory & we have taken two other factories on rent base.
should factory owner charge service tax to us on rent.

pls guide me

thanking you,

CA Unnikrishnan Nair N

CA Unnikrishnan Nair N (Expert)

26 October 2011 Service tax on renting of immovable property is a controversial matter and is before Supreme court. Three High Courts decided this question in favor of revenue. Hence as a matter of caution, all landlords now charge service tax.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

26 October 2011 The matter is under sub judice before the supreme court. The latest position is as under:-
Supreme Court on 14.10.2011 modified it’s earlier stay order of 28.9.2011 in the SLP filed by petitioners Retailers Association of India v. UOI against the Bombay High Court order that had upheld renting as a service with retrospective effect.Petitioners are now required to pay half of their liabilities in the next six months in three installments.
The court ruled on a petition filed on 28 September by the Retailers Association of India (RAI) and Multiplex Association of India challenging the Bombay high court’s 4 August judgement that made the tax applicable with retrospective effect from 2007 in Maharashtra. The top court will take a decision on the remaining 50% after a final hearing on the matter.

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