Query regarding Payment of Service Tax incase of Renting of

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Querist : Anonymous

Querist : Anonymous (Querist)

01 September 2010 An assessee let out its property at an annual rental @ 85000/- p.m i.e 10,20,000/- p.a. for the financial year 2009-10 (without any such condition of payment of service tax in rent agreement) . Also, he paid property tax amounting to Rs. 60,000/- p.a on such property.
If rent received during the year is reduced by Property tax paid during the year (As per Notification No : 24/2007 – ST, Dt : 22/05/2007) then the total receipt of rent goes below taxable limit of Rs. 10,00,000/-.
My question is that, whether this is allowable under Service tax Act or not.

Rajan Babu

Rajan Babu (Expert)
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01 September 2010 Yes. Property tax paid can be deducted while arriving at the aggrgate value for SSI exemption of Rs. 10 lakhs. It is allowable.

Querist : Anonymous

Querist : Anonymous (Querist)

01 September 2010 Dear Rajanji,

It means that, the above assessee is not falling under the ambit of payment of service tax.

Thanks for your response.

SANJAY TALATI

SANJAY TALATI (Expert)
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02 September 2010 The Service provider is exempt from the payment of service tax, if the taxable value of the services provided does not exceed Rupees Ten Lacs in any financial year. However, the service provider is required to obtain the Service Tax Regn. on crossing the limit of providing of Services amt. to Rs. 9 lacs.

Remember, the basic exemption is only in case the total value of taxable services provided from all the services provided does not exceed Rs. 10 lacs.

There are certain services like GTA , Business Auxiliary Services pertaining to the Foreign Commision Agent Services etc. wherein the service enjoyer has to take the service Tax Regn. and comply the provisions of Service Tax. The basic exemption ceiling of Rs. 10 lac is not applicable to such services.

As the Property Tax is not a value of services provided, the Assessee can opt for the exemption.

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