service tax

This query is : Resolved

Harini (Querist)
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05 May 2009 A company has taken on lease an office space in a residential block. Should the lessor charge service tax on the rental

Shyam Lal Naik

Shyam Lal Naik (Expert)
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05 May 2009 ST will be attracted if the lease is for furtherance of business or commerce, whether it is in residential block or not.

This is however, subject to the recent Delhi High Court's rulling.

CA Suresh Choudhary

CA Suresh Choudhary (Expert)
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05 May 2009 In my view the lessor should not charge any service tax on the rent till the further clarification release from the suprem court, because the Delhi high court has considered service tax on rent as unconstitutional.

Harini

Harini (Querist)
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05 May 2009 Keeping the SC ruling away, currently does leasing of office space attract service tax. There is no business of renting here, it is just that the owner (lessor) has rented out a property belonging to him to lessee being a company doing business. He is not involved in the business of letting.

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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06 May 2009 Yes there is a ST liable if we were not to take cognisance of the DHC judgment. It may be a good idea to ask the tenant to pay the same under protest due to the l;evy not being very clear. This would ensure that refund wouldbe admissible without time limit if the issue were finally settled in favour of the tax payer/ landlords.