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Service tax

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Nirmala Devi

Accounts Officer

23 Points Posted on 31 January 2014

Hi,

Our company is having rented accommodation in some places for which we pay rent, some of whom are paying service tax to the ST dept. They are now claiming ST for prior periods, even relating to previous financial year. Are we expected to pay it now? And are they supposed to claim it now?

Replies (2)

Ms. Sia Raman

Chartered Accountant- Working Profession

89 Points Posted on 31 January 2014

Rent on immovable property if used for the furtherance of Business / commerce attracts service tax. Under the VCES scheme, Any person who is liable to collect service tax but either not collected or collected but not deposited the same with the exchequer is liable to pay service tax including cess to the exchequer along with interest and penalty ( From the period 1.10.2007 to 31.12.2012) without any interest/legal dues/penalty etc. Hence, yes they can claim prior period Service Tax for the aforementioned period.

Manoj Agarwal

Service Tax Consultant Rourkela Service

2755 Points Posted on 01 February 2014

Kindly check your rent agreement with the landlord. If the agreement doesn't specifically provide for payment of service tax extra over and above the rent, then you can claim the rent amout to be inclusive of service tax and deny payment of extra tax.