service tax on rent

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ajay upadhyay (Querist)
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18 January 2011 A company has staff quarters.These quarters are given to company staff and contractors.The company deducts a fixed monthly amount from salary and contractors bills for such quarters and show the amount in RENT RECOVERY head in books of accounts.Whether the co. is liable to charge and deposit service tax on such amt recovered from employees and contractors.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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18 January 2011 As per explanation 1 of section 65(90a),letting of quarters of residential purposes is not "for use in the course of furtherance of business or commerce". Hence,as per my understanding, the company is not liable to pay service tax.

ajay upadhyay

ajay upadhyay (Querist)
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18 January 2011 thanks,Sir.

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