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Service tax on renting of cell phone towers

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(Querist)
02 July 2010 This is a company dealing with construction of cell phone tower & renting the towers to the telephone service providers.The company is charging service tax on the following-
1. Fixed Rental portion for the tower
2. Reimbursements of diesel and electricity charges from the client

The company is charging Service tax @ 10.3%. Is there an option for the company to opt for compounding or abatement scheme.
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Shyam Lal Naik

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Shyam Lal Naik (Expert)
02 July 2010 The company is charging service tax under the category of "supply of tangible goods for use". There is no compound/abetment scheme under this category.

In my view, diesel & electricity charges can be claimed as exempt under pure agent basis. Needs through examination of the contract.
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