ABC Ltd has a business arrangement with the tenant that the latter will pay only 50% of the service tax levied on him and the rest would be paid by landlord out of his own pocket.
For e.g. if the Service value is Rs. 100 and the service tax amount is Rs. 12.36, tenant would be paying only Rs. 6.18 and rest 50% i.e. Rs. 6.18 would be borne by the landlord.
My query is how should we treat the rental income? Should we deduct the Service Tax borne by the landlord from the service value and charge the remaining Rs. 93.82 or is there any other way out.
CAclubindia
