Service tax

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)
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.

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. 

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