Renting of a hotel

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 September 2012 If the assessee (A) is a owner of a hotel property, rents the hotel out to Mr. B , is there any liability of service tax on the rent that A receives from Mr. B given that the rent exceeds Rs. 1000000/-

CA Suresh Jain

CA Suresh Jain (Expert)
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30 September 2012 Renting of immovable property is liable to service tax. As per clause 18 of notification 25/2012 Services by way of renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purposes, having declared tariff of a unit of accommodation below rupees one thousand per day or equivalent is exempted from tax.

Now words renting of a hotel is normally construed to be renting of hotel room or an accommodation in Hotel.

If your property fall under the above category you can take a chance to contest a case with the help of a good consultant/advocate for service tax

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