Service tax on Immovable property

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This query is : Resolved

Suresh (Querist)

27 June 2008 We are a corporate running office in Sub-leased property at Bangalore. I have the following query with related to service tax as follows:

1. Are we liable to reimburse service tax to principal lessee? Notn.no ?

2. Are service tax is payable by both Principal Lessee and landlord? In this case it will be double payment for the same property. right?

CA Hemant T Dewani

CA Hemant T Dewani (Expert)

27 June 2008 you will collect service tax from your client & if you pay rent in excess of rs 10 lakhs in this year then you will told your landlord to charged service tax & get input tax credit .pay difference amount service tax charged & paid difference is paid

CA. C V SURYAM

CA. C V SURYAM (Expert)

27 June 2008 Sec.90(a)of Finance Act 1994 defines the term renting of immovable property. Sec.65(105)(zzzz) is the charging section. As per this both landlord and principal lessee are liable to service tax. Service tax charged by your principal lessee in his invoice can be taken as Cenvat credit by you and utilise the same for payment of service tax on output service. If centralised registration is applicable, then it will be a different issue for utilization of this Cenvat credit. Likewise, your principal lessee will take Cenvat credit of service tax charged in the bill raised by Landlord on him. Thus, double taxation is modulated. OK. Bi.

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