Service Tax on Letout property

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Anwar (Querist)
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24 October 2009 Hi,

I need a clarification regarding Service Tax

Our organisation is a department under Local Self Govermnent.

We have possed a building wich was leted by a 100 % Govt Owned company and we are paying Service tax on Rent.

We have sub leted a portion of building to an another 100% Govt owned Company. We have issued debitnote claiming the rent & service tax portion from the company.

But the company has denied to pay service tax by claiming that they are paying rent to Goverment[ Local Self Government department] also the space occupied by them is not for commercial purpose.

Please advise whether we can collect tax on Sublet Property

Amit Sheode

Amit Sheode (Expert)
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25 October 2009 Dear Anwar,
So far as renting of immovable property is concerned the said is liable to ST only when the renting is for the furtherance of business or commerce.
Local Authority is not Government. You can collect ST only when it is payable as per law.

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