service tax

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CA Kanwaljeet (Querist)
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30 April 2010 dear sir,
during the audit in a company i found the company received the bill of rent in which service tax charged by the lessor, but the company debited only basic amount in the books and no entry made for service tax (also input not taken), and payment made only basic amount, so it is possible
what is consequences of both the parties

Shyam Lal Naik

Shyam Lal Naik (Expert)
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30 April 2010 It is a matter of contractual agreement between the landlord and the tenant.

After the Delhi High Court's judgment in Home Soultions Retail India ltd., many a tenants have stopped payment of Service Tax on Rent.

The only consequence will be on the landlord. The basic amount shall be treated as cum tax in his hand and tax liability shall be discharged accordingly.

It may be stated that, the proposal in Finance Bill in respect of Renting Services has overrulled the High Courts's judgment(supra).

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