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Rent Including tax

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vinayagaum

Accountant

25 Points Posted on 04 February 2008

Dear All,

One of my friend located at cuddalore, he rented a commerical place Rs.5000 for small show room. They have entered into a agreement for 9 years.

After that our Govt of India introduced to collect service tax, now the tenent is not accepting to pay his service tax. There is issue, the agreement itself says rent incl of all tax.

Please give some soultion .

Replies (3)

parthasarathy

Practising C.A

170 Points Posted on 04 February 2008

Hi, Service tax will be levied upon you only if your gross rents received exceeds 8 lakhs per annum....let me know are your friends gross rents from all commerciall shops he owns and letted out exceeds 8 lakhs per annum

sanjay

22 Points Posted on 05 February 2008

Service tax is liability of users.Your friend is just assesse according to Sec.65 of finance Act 1994.The High court of Madras has decided in case of All india tax payers welfaree Ass.v/s Union of India (2006(4) S.T.R. 14 (Mad) that liability is of User only Your friend is collecting Agent.