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Service tax on commercial space

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Querist : Anonymous

Querist : Anonymous (Querist)

10 May 2014 Respected members,

With reference to above subject, kindly request you to help me on below matter.

I run my business in a premises which has a rent of 40000 per month, which will be 4,80,000/- per year.

Now my landlord is asking me to pay the service tax on rent which is at 12.36%. I am aware of the fact that the service tax is payable only if the annual income out of that premises is above 10 laks.

My landlord also runs lodge business in the same building. SO the total income of his business organisation is above 10 laks. But I am accountable for only 4.80 laks.

In this case why am I responsible for the payment of service tax? My rent does not cross 10 laks per annum.

Please advise if I am right or wrong?

Thanks
Rohan
Mangalore

Vidya Jain

Vidya Jain (Expert)

11 May 2014 Rohan,

The contention of landlord is correct, You are liable to pay service tax as the gross taxable income pf the landlord exceed Rs. 10 Lakhs. It is irrelevant that your rent does not exceed Rs. 10 Lakhs

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