Service tax liability

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Bhagat Singh Tomar (Querist)
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26 April 2017 Company X entered in to an agreement with a firm Y. it was agreed that Company X will take the property of firm Y on Rent. the agreed price fixed in agreement is 15 lakh.now after 8 months firm Y demand Service Tax in addition of rent. nothing is mentioned in agreement that 15 lakh is inclusive of service tax or exclusive of service tax.then who is liable to pay the tax??? kindly clarify. can call me 9990012243

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 April 2017 Company X is liable for service tax in addition to rent even nothing is mentioned in the agreement.
service tax is statutory liability. It is a tax which is required to be collected by the service provider from the person to whom service is provided and thereafter to be deposited with Government treasury within the prescribed time.
Thus essentially the statute is being imposing the tax upon the person to whom service is being provided and the service provider is merely a collecting agency.

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