On rent.

This query is : Resolved

P. RAJASEKHAR (Querist)
Follow

10 October 2013 Dear, A commercial establishment carrying the business at the rental premises, since 2009, the Tenant pays the Monthly Rent to the Land Lord after deducting the TDS, now the Land Lord is claiming the Service Tax to be payable since the date of Rental Deed Agreement signed - 2009. Is Service Tax is payable on Leased Premises / the ST to be borne by the Tenant or Land Lord. Hence forth the ST too be deducted along with the TDS in the Rent. Please clarify. Thanks.

CA Pallav Singhania

CA Pallav Singhania (Expert)
Follow

10 October 2013 landlords whose rental receipts are above Rs 10 lakh will be required to pay service tax only after crossing receipts of Rs 10 Lakh..

Present rules, however, exempt renting of immovable property to educational institutions from service tax. Renting of residential property, regardless of the rental amount, is also exempt from service tax.

"taxable service" means any service provided or to be provided to any person, by any other person in relation to renting of immovable property for use in the course or furtherance of business or commerce.

TDS will be deducted {U/S 194-I} on the amount including service tax..

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

11 October 2013 While the liability to pay service tax lies with the service provider, he/she/it shall charge service tax
to the service receiver.

Assuming that the landlord is liable to service tax, he would be within his powers to claim service tax from you, unless the there is a clause exempting from you from such a liability.

With regards to TDS, you have to now deduct TDS in the following manner:

Rent: Rs 100

Serv tax: Rs 12.36

Total : Rs 112.36

TDS: @ 10% R. 11.24

Net payment Rs 101.12

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now