Service tax on office rent
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
18 April 2016
Hi Expert,
We are a small IT company at Hyderabad and wanted to have small branch office at Bangalore. So we wish to pay Rent @ 40,000 per month to land lord. Also we wish to have this bangalore office as office cum guest house. If any employees going to Banglore on office visit, they can stay for few days and return back to Hyderabad.
Bangalore land lord is not having more than 10 lakhs income including this rent and he has only PAN No. So we will deduct 10% TDS u/s 194I and service tax will not be paid. My question is do we need to pay service tax in this like Reverse charge mechanism or any manner to service tax dept and second is how to account this bangalore office. It means to be accounted as " Office Rent " account or " Guest House Rent "
Please clarify
We are a small IT company at Hyderabad and wanted to have small branch office at Bangalore. So we wish to pay Rent @ 40,000 per month to land lord. Also we wish to have this bangalore office as office cum guest house. If any employees going to Banglore on office visit, they can stay for few days and return back to Hyderabad.
Bangalore land lord is not having more than 10 lakhs income including this rent and he has only PAN No. So we will deduct 10% TDS u/s 194I and service tax will not be paid. My question is do we need to pay service tax in this like Reverse charge mechanism or any manner to service tax dept and second is how to account this bangalore office. It means to be accounted as " Office Rent " account or " Guest House Rent "
Please clarify
CA R SEETHARAMAN
(Expert)
18 April 2016
For rent payments service tax under reverse charge not applicable. Book office rent and guest house rent proportionately.
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