Query Regarding Service Tax exemption

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Jayesh Krishnan

Equity Research Analyst

23 Points Posted on 17 November 2009

Hi,

My company (based in Navi Mumbai) is exempt from service tax due to the the services being provided to a U.S company and the remuneration being received in India in foreign currency. We do file service tax returns with nil tax.

We are planning to take a commercial property on rent. The landlord has asked us to pay service tax on rent. Will we have to pay service tax on rent as our company is exempt from service tax.

Kindly reply to this query

Regards

Jayesh

Replies (4)

CA Sumit Arora

1139 Points Posted on 17 November 2009

yes you have to pay service tax, Service Tax is Exempted only on Export of Services as Per Export of Services Rules, 2005.

In addition to above Services provided to following will be exempted

1. Services to UNO

2. Serivces to diplomatic mission for their personal or official use.

3. Services provided in Special Economic Zone.

Shashi Bhushan

Learner Jalandhar

835 Points Posted on 24 November 2009

Thanks sumit

Y.N.Vinod

Consultant - Risk Advisory Services

98 Points Posted on 27 November 2009

You have got the exemption only on the collection of the service tax on your taxable services. But the rent you are going to pay is the taxable service of others.

Hence, you are liable to pay the service tax on the rent.

Sunil

Trader

2253 Points Posted on 27 November 2009

You have to pay the landlord his rent less TDS plus the service tax. the landlord will register and pay the service tax.

If you have taxable services provided to residents, we will have to check if you can claim input against a taxable output. Usually they allow it if it can be corelated to your taxable output.