Service tax on Rent

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This query is : Resolved

HANUMA REDDY (Querist)

15 December 2007 Service tax on rent who shall be pay whether rent payer or a land lard. if total rent payment not exceeding the 8 lacs whether service tax is applicable.

Shyam Lal Naik

Shyam Lal Naik (Expert)

15 December 2007 The landlord should charge the tax in the invoice or similar document for rent, collect it from tenant and remit the same to Govt. Account.

The ultimate burden is on the tenant like other indirect taxes.

The limit of Rs. 8 lac does not have any relation to rent payment.

It depends on the total rent received by the landlord from all tenents including receipt for other taxable services.

K V Subba Rao

K V Subba Rao (Expert)

15 December 2007 As per my information, Landlord, being the Service Provider,has responsibility to make payment of Svc. Tax. Whether he would collect Svc. Tax from Tenant or not may depend on arrangement in between Landlord and Tenant.

But I would like to know whether it is true that Tenant is held responsible by the statute in the event of failure on the part of Landlord to collect and pay Svc. Tax, if so, could any one please provide me with detailed references to study.

Shyam Lal Naik

Shyam Lal Naik (Expert)

16 December 2007 No. Tenant can not be held responsible. In case the tax amount is not collected by the landlord, the amount received by him would be treated as inclusive of service tax.

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