service tax on rent

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Kinjal Thakkar (Querist)
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27 May 2010 We are in wholesale and retail business of baby products. we pay service tax on rent of shops at different locations in india. Now we have a property in india which we want to give on rent. Can we register and take set off of service tax on rent we pay. If there is refund can we claim it and what are changes of our getting it.

Thanking you in advance

Shyam Lal Naik

Shyam Lal Naik (Expert)
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27 May 2010 Set off is available on Services utilised for providing output service. Since, the shops taken on rent, are not utilised for renting your property, Set off is not available.

Service tax on rent is in dispute. The Delhi High Court has again stayed recovery of Service Tax on commercial Rent till disposal of the writ petition. A ruling by the apex court and Government's acceptance thereto only can settle the dispute.

You can take registration and pay tax under protest.

Kinjal Thakkar

Kinjal Thakkar (Querist)
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27 May 2010 The properties taken on rent are used for business purpose and property given on rent is owned by the company. So cant we say that both are for same business and thus take the set off

Kinjal Thakkar

Kinjal Thakkar (Querist)
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27 May 2010

Shyam Lal Naik

Shyam Lal Naik (Expert)
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27 May 2010 The rented property is used for business purpose, but not for providing output service.

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