service tax on rent

Service Tax (Legacy) 1935 views 4 replies

shrabani dutta

CA final student

110 Points Posted on 25 July 2007

If a property is jointly owened by Co-owners but the rent received thereon is shown individually in the income tax files of each of the coowners then whether the service tax will be applicable to the whole of the rent of the property or on the share of each co-owner. e.g. if the total rent on a coowned property is Rs.10 Lakhs and the same is divided among 4 co-owners equally , then what will be the serervice tax implication on the above and who will be liable to pay service tax?

Replies (4)

Shyam Lal Naik

Service

6158 Points Posted on 25 July 2007

Certainly a seevice provider can not be held liable for service provided by any one else. Hence I feel, each of the co-owners will be liable to pay tax on the amount of rent received by them, subject however to the eligibility of the owner to exemption of Rs. 8 lac. The arrangement should be reflected in the rent agreement itself. There are litigations going on in various courts as to whether letting immovable property is service at all and is exigible to service tax. We have to wait for the final verdict.