Service tax on rents

This query is : Resolved

vishnu (Querist)
Follow

03 September 2007
Is service tax applicable on rents received by one division, which is paid by an another division of the same company.

each division is profit center and the books are consolidated.

thanks

Raj

Raj (Expert)
Follow

04 September 2007 If you see Accounting treatment then AS 9 says , no actual profit is realizing between branches or units because ultimately it will set off during the consolidation of accounts, But as far as service tax concern having different service tax no. in my opinion service tax should be provisioning.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
Follow

04 September 2007 It is transfer from left pocket to right pocket . It is notional and no actual rent is being paid . Owner is paying to the owner . Therfore , in my opinion no service tax is payable .

Kaustuv

Kaustuv (Expert)
Follow

04 September 2007 service tax provisions are attracted when there are two parties. one can't give service to oneself. so service tax provisions are not attracted here

vishnu

vishnu (Querist)
Follow

04 September 2007

But in case of import of services from foreign, service tax is applicable even in case the services are obtained from division/s situated outside india by the comapany situated in india.