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Service tax on rent

Eshwar Dharamdas (Employee)     20 October 2012

Eshwar Dharamdas
 36 points

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Our company has taken a go-down on rental basis; there is no written document with this respect.

Now Land lord has circulated letter stating us to pay the service tax on lease rentals based on the latest notification under service tax act.

My question with respect to above situation is as follows.

1)      Can we say that lease rentals paid includes service tax.

2)      If no should we pay the service tax on lease rentals that we have paid.


CA Chandrashekar L (Practicing Chartered Accountant)     20 October 2012

CA Chandrashekar L
Practicing Chartered Accountant 
 18 likes  245 points

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As per the Declared services under section 66E Renting of Immovable property attracts Service Tax.

a) Wether lease rent  paid is inclusive or not of service tax depends on lease rental Agreement .

b) If agreement says lease rental is not inclusive of service tax ( generally in some agree. it may have clause that , taxes if any to be paid over and above the rental) than in such a case company will be liable to pay service tax.   

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