service tax on rent from immovable property

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Sekhar (Querist)
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14 August 2009 Sir, I have query about the service tax on rent from immovable property. We have got a commercial building in Tuticorin and the first floor of the building is being given for rent to shipping liners and as it is a commercial purpose we are debiting service tax for the rent from them. In this my question is we are billing them Rent,Maintenance fee,Security fee and service tax calculated on the above three. But the tenent says that to calculate Service tax only from Rent and not to include maintenance and security fee in Service tax calculation and pointed out some high court verdict in this regard. So kindly may we request your good selves to give me a solution for this whether we have to calculate service tax only on
Rent or from rent,maintenance fee,security fee. Please clarify this to me.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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15 August 2009 Dear Mr. Sekhar,

The matter of service tax on rent of commercial property is sub-judice.

The Supreme Court has admitted departmental appeal against the recent judgement of the Hon'ble High Court of Delhi.

As such, opinion on such a matter can not be expected from this forum.

How ever, from the facts naratted by you, it is observed that, the contetion of tenents is contrary to the Delhi High Court's view.

The Delhi High Court has held that, service tax in relation to renting is taxable and not the renting perse. Applying the above ratio, Maintenance Fee, Security fee etc., being charged by you are definitely services in relation to renting are taxable. As stated, the matter of taxability of rent is subjudice. To be on the safe side, you may deposit the tax under protest.

Shyam Lal Naik

Shyam Lal Naik (Expert)
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22 May 2010 For update on the issue, please visit : -

https://www.caclubindia.com/forum/service-tax-on-renting-under-challange-84223.asp

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