Peculiar service tax problem

Sir,

In your case you are having only income from rent ant you recd. Rent included Service Tax which is you are not having the said number and you are also paid as a rent Rs. 50000 with service tax p.m. and collected the same Rs. 70000 p.m. with service tax.

In this regard you are not eligible to collect service tax amount with registration in concern dept.

If you collected the same then your liability have to pay said amount otherwise you are penalize by the penalty with interest and also deposited the said amount.

First you have to register the same then you raised the amount without service tax, because you are SSI exemption limit Rs. 10 lakh.

Secondly which is rent paid by you including service tax , check the eligibility of service provider, they are eligible to collect service tax.

Service tax exemption limit in this case Rs. 1,80,000.00 p.a.

In the case of Income Tax i.e. your income is calculated Rs. 20000*12=240000, then your taxable income Rs. 40000 .

Hope you got if any further query then forward the same.

Thanks.

But how much should i declare as service tax amount as I get 8652 toward service tax (rent 70K) from the tenant, I pay Rs.6000 as service tax, which amount should i declare to the service tax department. 

I do not understand how you are collecting service tax from your tenant

1. If you have no service tax Number and if

2. Total rent received by you is less than 10 lakhs.

Only If you and your land lord are a registered ST payers, the situation envisaged by you will arise. Please clarify

If the owner of the property is charging you service tax on Rs. 50,000 means you are paying him Rs. 6180 pm as service tax. He may be charging because he might have other rented properties or other services taking his aggregate taxable services exceeding Rs. 10 Lacs.

Now, you are charging service tax on Rs. 70,000 i.e. Rs. 8652 without registration is clear violation of law. You must take registration immediately. You have to deposit the difference (8652-6180) = 2472 pm to the government. Your profit will remain Rs. 20000/-.

Else, if the tenant is not eligible to take cenvat credit, you may revise the rent to say 75000 without service tax and keep away from the service tax net. You tenent will save 3652 and your profit will be 18820 and no need to take service tax registration and no need to file returns.