Renting of immovable property services

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Amarjeet Singh Dahiya (Querist)
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05 March 2014 Dear Reader,

Please tell me Exemption and Taxable Percentage of service tax on Rent received from our Plot Situated in industrial area and tenant has use the space for fabrication purpose

Nikhil Kaushik

Nikhil Kaushik (Expert)
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05 March 2014 please refer https://www.servicetax.gov.in/st-profiles/renting-imovablepropty.pdf

Amarjeet Singh Dahiya

Amarjeet Singh Dahiya (Querist)
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05 March 2014 Dear sir i was also read this note but i can't find the exemption and taxable rates on this service i have also over basic exemption limit and i apply this service as new.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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21 July 2025 Got it! Here’s a clear breakdown for service tax on renting of immovable property used for industrial purposes (like fabrication) as per pre-GST regime (Service Tax Act):

1. Taxability of Renting of Immovable Property (Industrial Plot)
Renting immovable property for commercial or industrial use is a taxable service under "Renting of Immovable Property" service.

If the tenant uses the space for fabrication or any business purpose (not residential), service tax applies.

2. Exemption Limits (Pre-GST)
Aggregate value of taxable services (including renting) up to ₹10 lakh in a financial year was exempt from service tax (basic exemption limit).

If your total gross receipts from renting services exceed ₹10 lakh, service tax registration and payment are mandatory.

3. Taxable Value and Rate
Service tax was charged on 100% of the gross rent received.

The service tax rate varied over time; in 2014, it was generally 12.36% (which includes 12% service tax + 2% education cess + 1% secondary and higher education cess).

No partial exemption or concessional rate for industrial plots.

4. Input Tax Credit (ITC)
Since this is a service provider earning rental income, ITC was generally not available on inputs used to provide this service.

Summary for your case:
Aspect Details
Type of property rented Industrial Plot
Use by tenant Fabrication (Industrial use)
Service tax applicable? Yes
Exemption limit ₹10 lakh aggregate turnover
Taxable value 100% of rent received
Tax rate (2014) ~12.36%

What you should do:
If your rent receipts exceed ₹10 lakh, you must register for service tax.

Collect and pay service tax on the rent received.

File returns as applicable under the service tax rules.

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