08 January 2008
When your company is operating a guest house with food facility, it has to be analysed that whether it is used for commercial purpose or residential purpose. In case your company is receiving the rent on immovable property which is used for commercial purpose then your company is liable to collect the service tax at the rate of 12.36% provided it exceeds Rs. eight lakhs for the year 2007-2008
10 January 2008
Thanks, Would like to have the following clarification also. - whether this service tax 12.36% is applicable even if the guest house has less than 5 bedrooms? Pls explain. - It is used for commercial purpose (similar to service apts) only.
16 January 2008
Even the guest house has less than five bedrooms, still you are liable to pay the service tax. There is no such limit for guest house except for construction of residential complex where the limit is below 12.
CAclubindia
