03 August 2025
For service tax on rent of factory building, as per the rules applicable before GST:
The service provider is liable to pay service tax.
Here, the landlord (owner of the factory building) is the service provider, because they are providing the service of renting out the factory premises.
So, landlord has to pay service tax on the rent received.
However, the landlord usually charges the service tax amount extra from the tenant (as per terms of agreement), collects it, and then deposits it with the government.
Summary:
Landlord is liable to pay service tax.
Landlord can recover service tax from tenant (tenant pays it indirectly).
Tenant is not directly liable to pay service tax to government.
Note: If the annual rent is ₹7,50,000, and service tax threshold is crossed (which was ₹10 lakh then), service tax applies on the rent amount.
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