Service tax on conducting agreement

There is no reverse charge mechanism for payment of rent. Hence, for you there is no implication under Service Tax.

Hi VIkas

Does it mean that owner should pay the service tax not the tenant.  Moreover, In the conducting  agreement we have mentioned that,  we are paying xxx amount to owner as conducting fee

Please confirm

Thanks

wable

Service tax is an Indirect tax, The owner will collect the amount from the tenant and Pay to the Govt. The owner will have to raise an Invoice and collect the rent and other charges as per the agreement and discharge the ST liablity

Hi Prasad/Vikas

But we have not mentioned in the agreement that service tax should be paid by the tenant. Again we are going to run the fine dining restaurant so we are paying service tax for that business.

If you say owner should collect the service tax on rent from the tenant then we are going to pay service tax 2 times for the same business

a.     For the running business & paying on the service tax on service we are giving to customer (since we have fine dining restaurant).

b.    Service tax collected by the owner over the rent.

Also, I have one more question that service tax is part of rent or is it over & above the rent?

In our agreement we have not mentioned anywhere that we should pay owner the rent + service tax. It is just the conducting fee we should pay to owner.

Please advise.

Regards

Vitthal

Firstly,

You are correct, you may have to pay service tax indirectly on rent and directly on the services provided to the customers.

This is something being done by all.

Secondly, Service Tax is a value added tax; meaning, you may also claim the cenvat credit of the SErvice tax paid on the input services i.e., rent and adjust against the service tax charged to the customers.

Service tax on conducting charges is levied under which section,