Threshold limit calculation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2015 I am receiving rent for letting out a portion of my premises for commercial purposes. As per contract with tenant, the municipal tax paid by me is re-imbursed by the tenant. Now for calculating threshold limit of Rs 10 lakhs, whether I have to add municipal tax to come to the total taxable services provided by me?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 October 2015 Municipal tax need not be added as it is a deductible item.

Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2015 Thanks for the reply. I understand for calculating service tax payable, Municipal Tax paid is to be deducted from Gross rent recipt. But my question was whether Municipal tax to be added to Rent received for calculating the threshold limit of Rs 10 lakhs. Eg If the rent is Rs 9 lakhs and Municipal tax is 1.25 lakhs (say) total being Rs 10.25 lakhs, then whether threshold limit of Rs. 10 lakhs is exceeded and service tax is to be paid?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 October 2015 It is not exceeded, if municipal tax is deducted the rent is only 9 lacs.

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