Service tax on renting of immovable property

This query is : Resolved

saurabh (Querist)
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02 January 2012 Hi I am a tenant and have paid rent as follows :

07-08 : 861300
08-09 : 1148400
09-10 : 1587874
10-11 : 1901784
11-12 : 1901784

Renting of immovable property has become taxable from 01/06/07 .

Can i claim exemption from service tax as SSP in 07-08 as previous year this service was not chargable to tax ?i.e. i need to pay tax only on 61300(861300-800000) or 861300?

also SSP limit was raised to 10 lakh in yr 08-09 so can i claim exemption of SSP for year 08-09?

NILESHKUMAR

NILESHKUMAR (Expert)
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03 January 2012 If you are paying rent , than there is no liability.

If you are receiving rental income means you become providor of a taxable service for which threshold limit was 8 lacs for 7-8 now it is 10 lacs . If the amount of services rendered by you crosses this limit you have to pay tax on differential amount.

You may also enter such a agreement seperately for charging rent towards utilities sepeaterly such as electricy, water, furniture and other fixtures which is not taxable as per the defination of immovable property as per the Service Tax provision.

for example monthly rent is fixed rs. 100000 .

chanrge Rs. 75000 for utilities etc and
remaining amount as rent of premises .

which will not cross rs. 10 lacs per year so you are not require to pay any service tax on rent collected on premises also subject to enter sepearate agreement , seperate bhada chitti under both this heads.

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