Registration

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tejas (Querist)
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05 December 2012 dear sirs
i want to ask a query which is as under

5 partners are making a small mall on their land after colapsing their shop
they form a partnership firm. they are going to make small officies in that mall and will give on rent
which may go above 10 lacs

i want to know is the firm is liable for registration under service tax or not
if yes pl. tell the procedure

thanks

Jayant Bothra

Jayant Bothra (Expert)
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05 December 2012 Dear Tejas,

If individually their collection of rent exceeds Rs. 10 lakhs then they are liable to get themselves registered another wise they are not required to get them self registered.

Please refer the case of Smt. K.D. Chaudhary v. Commissioner of Service Tax, CESTAT , Ahmedabad Bench.

Regds

CA JAYANT BOTHRA
M: 9873-626-020

tejas

tejas (Querist)
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05 December 2012 but sir they won't get individual rent as they will get rent on the name of firm
and aggregate rent will exceed rs10 lacs

Jayant Bothra

Jayant Bothra (Expert)
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05 December 2012 Dear Tejas,

that is need to be check that how they distribute the proceeds among them... ask them for the copy of agreement... if they are recieving it in the name of firm then service tax shall become chargeable....

Regds

CA JAYANT BOTHRA

tejas

tejas (Querist)
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05 December 2012 yes sir they will receive the rent in the name of firm & after that they will equally distribute the profit

Jayant Bothra

Jayant Bothra (Expert)
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06 December 2012 Dear Tejas,

In this cas firm shall be considered as service provider, so Rs 10 lakh is applicable on firm. Therefore, they are liable to charge service tax.

However, if they want to save from service tax then enter into fresh agreement with service receiver and in that agreement show the amount of rent that each will receive, from this you can save the service tax.

regds

CA JAYANT BOTHRA
M: 9873-626-020

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tejas

tejas (Querist)
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07 December 2012 Thank You very much Sir
for giving guidance
thanks a lot

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