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rent recd from bank applicable for service tax ?

rohit chadha (accountant) (102 Points)

01 June 2016

sir/madam

we have recd rent from canara bank , and they not paying service tax to us, but we pay service tax on behalf rent recd from bank

1) can we deemanding service tax from bank

2) is that ok to pay service tax not recd by bank?

3) have any intimation service tax exption rent from bank ?

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6 Replies

Pankaj Kannaujiya (Practicing Cost Accountant at Kannaujiya & Co.) (133 Points)
Replied 01 June 2016

Rent on Commercial Property are liable to pay service tax. In your case you can charge service tax seprately on Monthly basis by raising Invoice by every month. If bank not willing to pay the service tax , you have to pay service tax from your own pocket.

Regards

Pankaj Kannaujiya

Ramesh Purushothaman (Manager - Finance & Accounts) (46 Points)
Replied 01 June 2016

You must enter into lease agreement, which was mutually agreed upon. if your agreement does not agrees bankers will not pay, however you have to pay. However there are some exemption limits available.

1 Like

K Srinivas, CMA CS (Founder Artha Consulting Services) (5181 Points)
Replied 01 June 2016

While service tax is applicable on rent of commercial property(including to a bank), the threshold limit is Rs.10 lacs per annum. If the rent doesn't exceed this limit, no service tax is applicable

2 Like

s jain(CA Clubindia) (OFFICER) (35 Points)
Replied 01 June 2016

In addition to the reply given by Mr. Srinivas, in case rent is received by individual from a corporate office, then liability to pay service tax is on corporate or company.

CA Vinit Ratnaparkhi (Internal Auditor) (66 Points)
Replied 02 June 2016

Reverse charge mechanism is not applicable for renting of immovable property by Individual to Corporate. Service Provider, be it individual,HUF,Firm,Company has to discharge the service tax liability.

SOMNATH MALLICK (CENTRAL EXCISE & SERVICE TAX SUPERINTENDENT) (32 Points)
Replied 02 June 2016

If the tax is not collected, then the provider can pay cum-tax basis, I.e. the amount of rental income considered to be inclusive of service tax and accordingly tax would be payable.