Service tax on renting of immovable property

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CA Sanjay Baheti (Querist)
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25 October 2012 One of my client being an Individual has given Factory premises owned by him (i.e.Commercial Property)to 2 occupiers being manufacturer covered under Excise law based on Sq.yard rate by means of Leave and Licence Agreement. Rental Income comes Rs.163000/- and 10000/- p.m. respectively from these 2 occupiers.
Hence up to Aug,2012 the Total Rental income from each Individual occupier comes to Rs.815000/- and Rs.50000/- respectively, Hence total aggregating Rs.865000/-. Now for the month of Sept,2012 Rs.163000/ and Rs.10000/- If we consider the said Rental Income then My client has to register with S.T. Dept. and charge S.T. as total Turnover exceeds Rs.900000/1000000/- as the case may be. Accordingly I apply for the same i.e. ST-1 in the month of Oct,2012 i.e. on 25/10/2012 today itself..

Now my query is as under:-
i) How to prepare Invoice/Bill to each Occupier along with Service tax @ 12.36% from Sept,2012 & On-wards as in Sept,2012 itself turnover exceeds Rs.1000000/- i.e. Rs.978000/- & Rs.60000/- from each occupier.
ii) How to compute Interest @ 15% p.a. for delayed payment of Service tax and on which amount as well as for how many months i.e. either for 1 month or 2 Months.

Amol S Joglekar

Amol S Joglekar (Expert)
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25 October 2012 01. From Oct 2012 onwards, start charging 12.36 % service tax on the rental amount. Forget about, the small difference, if any, (between 10,00,000 and 9,78,000) 02. The payment falls due say by 5th of the month. Say Nov. 2012, You are paying the same in Dec.2012 right? Pay the interest for 2 months i.e. nov as well as dec.2012

CA Sanjay Baheti

CA Sanjay Baheti (Querist)
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26 October 2012 Mr.Joglekar,

Thanks for reply.However I understand that you did not get my query.For your information the Total rental Income from these 2 occupiers exceeded Rs.1000000/- I.e. Rs.1038000/- up to period Sept,2012 so My client has to pay service tax On Rs.38000/- so far period up to Sept,2012 is concerned. now the query is how to prepare invoice/Bill along with Service Tax liability on Rs.38000/- to both of occupiers.No doubt after Sept,2012 and on wards i.e. From Oct,2012 each invoice/Bill is charged to service tax @ 12.36%.

Amol S Joglekar

Amol S Joglekar (Expert)
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26 October 2012 Choice is with you. 01.Let service provider bear the service tax of 4 - 5 K (amount exceeding 10 lakh in sept 2012. Oct onwards seems to be NO PROBLEM for you.) 02. Load this much service tax to service receiver on PRO RATA basis. 03.Recover it fully from 163000 rental and so on. Service provider has the choice to recover the same.

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