IN CASE IF THE TURNOVER OF A PERSON EXCEEDS Rs.10 LAKH THAN HE IS UNDER THE AMBIT OF SERVICE TAX APPLICABILITY, BUT SINCE THE AMOUNT COLLECTED BY HIM REGARDING RENTING OF PROPERTY IS FROM SMALL TENANTS WHOSE OVERALL TURNOVERS WERE LESS THAN 10 LAKH.SO UNDER SUCH CASE WHETHER HE IS LIABLE TO COLLECT AMOUNT OF RENT ALONG WITH SERVICE TAX FROM SUCH SMALL TENANTS.
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Service tax applicability
Replies (3)
In service tax, there is no exemption on renting of immovable property on the basis of turnover of tenant. However, some exemptions are given on the nature of property and business of tenant. You have not clarified whether property under consideration is residential or commercial or agricultural. Further, nature of business of tenants is also not clarified. If this is the case of commercial properties rented to small businessmen, service tax will be liable.
ST applicability is for the service provider, who is having the turnover of more than 10 lakhs, and it is doesn't depend upon the customers (whether small or large customers).
For example: if u go to a restaurent he will charge ST on the services provided by him, not on small or large customers to him. Hope you understand what i want to convey to u.
In your query " he should collect ST on all the services provided by him subject to turnover limit and other provisions relating to renting of immovable property to various purposes"
Once the turnover of taxable services of a a person, eligible for small scale exemption, exceeds Rs.10 Lakh, he is liable to pay service tax.
He is liable to pay service tax irrespective of the fact whether the amount of renting is collected from small tenents or otherwise.
If the element of Service Tax is not collected separately from the small tenents, the amount received is to be treated as cum-tax price and accordingly the service tax payable is to be calculated.
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