Leave & licence agreement & service tax clause
Querist : Anonymous
when leave & licence agreement is drafted ,how the licenee has to secure that liability of service tax will be on company?
what clause or words to be mentioned in the agreement?
please guild me
The activity of renting is a taxable in service tax under the heading of Renting of immovable property.
But, there are certain exclusions from immovable property like "building used solely for residential purposes and building used for the purposes for accommodation.
Therefore, as per my view you should include the following clause in your leave and licence agreement.
"The scheduled premises(as mentioned in the ___ schedule) shall be used solely for residential purpose of the lessee and the same property shall not be used for the purposes of furtherance of business or commerce"
Hope this ans would satisfy your query
Querist : Anonymous
Bcz as per expl given by the act covers every type of arrangement which are related with furtherance of business or commerce.
So, any type of contract entered for using any immovable property (sub to certain exclusions) would attract service tax.
Querist : Anonymous
But in the given case, service tax is paid normally.
Limit is applicable.
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