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Service Tax on Rent

D.Durga Prasad (CA - Student) (78 Points)

27 March 2008

Dear Sir,

Can you Explain about service tax:

We paid a Rent for Business unit (Software Business and Medical transcrption). For this rent whether we need to pay service tax or the land lord shouls pay service tax. can you give me related website or notification for this

Thanks

Prasad

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27 Replies

Prasad R (CA Final) (2128 Points)
Replied 27 March 2008

hey whether service tax is to be paid by you on rent for business unit depends on ur contract with the landlord if the contract says that service tax will be borne by the tenant then u'll have to pay the s-tax to the landlord. on the other hand if the contract says that service tax has to be borne by the landlord then u need not pay any service tax.

Generally service tax being an indirect tax, it is assumed that the one utilising the services has to pay the service tax. In this case ur the one utilising the services but in any case ur liabilty would be subject to ur contract with ur landlord.

Regards

Prasad.R

CA Harbinder (CA ) (1245 Points)
Replied 27 March 2008

yah.. generally it's assumed that one who are utilising the services will pay the service tax unless or otherwise the agreement says something different.

C.rajesh (Articles) (1392 Points)
Replied 27 March 2008

hai,

whether there is any special rate of service tax for courier services. plz explain the provision brefly or specify any notifications or circulars in this regard.

thank u.

C.rajesh (Articles) (1392 Points)
Replied 27 March 2008

hai,

I think for levy of service tax three conditions has to fullfill. there must be a service, there must be a person who has to receive the service. there must be also a service provider. rent paid for commercial or business unit will not attract service tax unless it will come under business auxillary or mandap keeping services.

Prasad R (CA Final) (2128 Points)
Replied 27 March 2008

C. Rajesh rent on commercial buildings is liable to service tax under the service " Renting of Immovable Property service ". This service was brought into tax net w.e.f 1st june 2006.

So renting of commercial building is definitely subject to service tax. Refer section 65(90a) and section 65(105)(zzzz) of the Finance Act.

Regards

Prasad.R

(Guest)

My Client M/s THPL (a pvt. ltd. co.) is acquiring the property on rental basis from mall owners and pay service tax to mall owner on rent. But THPL again sublet the same property to its sister concern Pvt. Ltd. Co. m/s Encore .

Will THPL charges Service Tax to Encore for subletting of commercial property???? Does subletting is covered under services of renting of commercial property???

If sercice tax applicable then Can THPL get the Cenvet credit of service tax paid to mall owner against service tax collected from Encore or from other services.

Please advice me from the veiw point of service Tax, VAT and INcome tax(T.D.S.)

Thanks & Regards

CA. Heeralal Chaudhary

OFFICESELVA (Service) (515 Points)
Replied 28 March 2008

From Service Tax angle:

Is the rent paid by M/s.THPL to the mall owner is inclusive of rent paid by M/s.Encore.

The service tax liability is on the owner of the mall. Only he has the power to collect Service. If there is splitting of rent to avoid service tax liability then it will be entirely different matter.

(Guest)

If I pay 6 Month Rent in advance ( Rs.60,000.00), should I pay the Service Tax also in advance (11236.00) ? . If so subsequently, How to adjust the Service Tax paid in Advance, incase the service tax charged in the subsequent month also !!!

(Guest)

Is Service Tax applicable on leasing of office furniture ?

(Guest)

service tax applicable on Crane Rental services

jesal jain (Business) (20 Points)
Replied 11 June 2008

I have supplied Crane on Hire Charges on which party is deducting TDS @ 11.33%. I Want to know the Service Tax Impact on this.Is Service Tax Applicable?

Azmathullah Khan (Accounts Manager) (1386 Points)
Replied 11 June 2008

Service tax should be on the charge or utilised on the basic of receipt or payment, but not on the basic of credit.

(Guest)

Originally posted by :Guest
"	I have supplied Crane on Hire Charges on which party is deducting TDS @ 11.33%. I Want to know the Service Tax Impact on this.Is Service Tax Applicable?	"

(Guest)

Originally posted by :Guest
"	I have supplied Crane on Hire Charges on which party is deducting TDS @ 11.33%. I Want to know the Service Tax Impact on this.Is Service Tax Applicable?	"