Service tax applicability
This query is : Open
Querist : Anonymous
Querist :
Anonymous
(Querist)
22 November 2016
SERVICE TAX APPLICABILITY:
By the virtue of Notification No. 26/2016 dt 20th May, 2016-Service Tax, please clarify weather Service Tax applies on Renting of Immovable Property Services provided to an Educational Institution
By the virtue of Notification No. 26/2016 dt 20th May, 2016-Service Tax, please clarify weather Service Tax applies on Renting of Immovable Property Services provided to an Educational Institution
Sunil Kumar
(Expert)
22 November 2016
Hi,
The service tax on renting of immovable property is not get out of ambit of the service tax net. The notification you mentioned above was to provide that if the Service provided by govt. to Business entity having turnover less than 10 lakh in PFY, then no service tax would be payable. Howver, this exemption was not available in case of renting of immovable service.
It is important to note that the service of Govt. generally cover under reverse charge. Therefore, to give the benefit to SSP this exemption was provided. However, the exemption would not be applicable in case of Renting service by Govt. as in such case forward charge applies.
The service tax on renting of immovable property is not get out of ambit of the service tax net. The notification you mentioned above was to provide that if the Service provided by govt. to Business entity having turnover less than 10 lakh in PFY, then no service tax would be payable. Howver, this exemption was not available in case of renting of immovable service.
It is important to note that the service of Govt. generally cover under reverse charge. Therefore, to give the benefit to SSP this exemption was provided. However, the exemption would not be applicable in case of Renting service by Govt. as in such case forward charge applies.
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