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This query is : Resolved

VINOD KOTHARI (Querist)

22 October 2010 Company A has taken premises on rent from a trust. The trust charges service tax on the rent.The rent for the year is Rs.17 Lakhs.

Now company A in turn let out the same premises to Comapny B charging the same rent which it is paying to the trust inclusive of service tax.

The question is whether company A comes under service tax net? Is it mandatory for company to get registered under service tax law.

Our contention is that output and input service tax is same so there is no tax liability on company hence its not required to get registration certifcate from service tax department.

Kindly advice.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)

23 October 2010 Service tax is applicable for renting of immovable property by the owner or person having the right therefore.

Service tax will be applicable in sub-let case,if company A has the power to sub let the property.

Input service tax will be available, Registraion is must since the amount is above 9 lakhs.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

23 October 2010 Is the trust a religious oine. if so no ST liability at all.

If not then it maybe noted that ST liability is in dispute and presently before the DElhi HC. If the tent is willing to pay then the same can be paid under protest. If not question is whether litigation can be faced. If not then pay under protest.

Many landlords have written to the dept that in the light of the HC stay they are not paying.

Call is on client.

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