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service tax

This query is : Resolved 

HI.. is there any case laws/circulars/jusdgments which says that the receipient of services is liable to pay ST and not the Servcie provider?

New section 66A(1) (effective from 18-4-2006) provides that where any service specified in section 65(105) of Finance Act, is,— (a) provided or to be provided by a person who has established a business or has a fixed establishment from which the service is provided or to be provided or has his permanent address or usual place of residence, in a country other than India, and (b) received by a person (hereinafter referred to as the recipient) who has his place of business, fixed establishment, permanent address or usual place of residence, in India, such service shall, for the purposes of this section, be taxable service, and such taxable service shall be treated as if the recipient had himself provided the service in India, and accordingly all the provisions of this Chapter shall apply.

Another instance is in the case of GTA, where receipient is also made liable for payment of service tax.


Our issue is this :-
We are basically a Software company owing a commercial building. We have let it for rent and the total rent receivable exceeds Rs. 8 lacs per annum . When we raised the invoice along with ST component, the lessee refused to pay the same stating that it is not part of the original agreement. How do we convince them to pay the Service Tax ?



Kindly refer Section 68(2) and Notification No. 36/2004-ST , dated 31/12/2004.


Notification No. 36 /2004-Service Tax

In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), the Central Government hereby notifies the following taxable services for the purposes of the said sub-section, namely:-

(A) the services,-
(i) in relation to a telephone connection or pager or a communication through telegraph or telex or a facsimile communication or a leased circuit;
(ii) in relation to general insurance business;
(iii) in relation to insurance auxiliary service by an insurance agent; and
(iv) in relation to transport of goods by road in a goods carriage, where the consignor or consignee of goods is,-
(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
(b) any company established by or under the Companies Act, 1956 (1 of 1956);
(c) any corporation established by or under any law;
(d) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India;
(e) any co-operative society established by or under any law;
(f) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder; or
(g) any body corporate established, or a partnership firm registered, by or under any law;
(B) any taxable service provided by a person who is a non-resident or is from outside India, does not have any office in India.

2. This notification shall come into force on the first day of January, 2005.

F. No. 341/18/2004-TRU (Pt.

V. Sivasubramanian
Deputy Secretary to the Government of India

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