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SERVICE TAX ON GUEST HOUSE RENT

Rama Krishna (Accounts Executive) (70 Points)

23 March 2010

Sirs,

Can you please clarify me the service tax applicability on the following:

1. An individual, whose turnover exceeds the threshold limit for service tax, has given building to a company which is used by them as their guest house. Can the individual charge service tax on the building given on rent, which is used by the company as guest house for their employees. I was informed that service tax is not applicable on the guest house rent. If it is so, can you please inform me the notification no., etc.

2. Service tax applicability on the Rent of building for education institution. Can we charge service tax from the educational institution. I was informed that exemption is available for educational institutions. If it is so, can you please inform me the notification no., etc.

Thanks in advance,

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1 Replies

A.Deepa (CA ) (195 Points)
Replied 23 September 2010

In Renting of Immoveable Property service there is a specific exclusion for the property which has been used as Boarding houses. Since the property has been used as geust houses by your company. It falls under the specific exclusion of Renting of immoveable property service and hence Service tax is not applicable

Properties are not liable for service tax under Renting of Immoveable property:

i. Renting of immovable property by a religious body or to a religious body
ii. Renting of immovable property to an educational body, imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching center.
iii. Land used for educational, sports, circus, entertainment and parking purpose and
iv. Building used solely for residential purpose and building used for accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities.