SERVICE TAX ON GUEST HOUSE

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Querist : Anonymous

Querist : Anonymous (Querist)

06 August 2010 WETHER SERVICE TAX IS APPLICABLE ON GUEST HOUSE SERVICES OR NOT. IF YES THEN PLEASE GIVE DETAILS OF SERVICE & SECTION NO. & IF NO WETHER ANY CASE STUDY WHICH SUPPORTS IT?

THANKYOU

VINOD ARORA

VINOD ARORA (Expert)
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06 August 2010 Sec 65(105)(zzzz) has defined the taxable service as to any person, by any
other person in relation to renting of immovable property for use in the
course or furtherance of business or commerce.

Explanation 1. — For the purposes of this sub-clause, “immovable property” includes —
(i) building and part of a building, and the land appurtenant thereto;
(ii) land incidental to the use of such building or part of a building;
(iii) the common or shared areas and facilities relating thereto; and
(iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate,
but does not include —
(a) vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes;
(b) vacant land, whether or not having facilities clearly incidental to the use of such vacant land;
(c) land used for educational, sports, circus, entertainment and parking purposes; and
* (d) building used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding
houses, holiday accommodation, tents, camping facilities.*

Explanation 2. — For the purposes of this sub-clause, an immovable property partly for use in the course or furtherance of business or commerce and partly for residential or any other purposes shall be deemed to be immovable property for use in the course or furtherance of business or
commerce;

Since guest house used for the purpose of accommodations and the taxable service itself excludes it is outside the ambit of service tax and hence not chargeable to tax.

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