Hi Experts,
A Lessor has rented out a building to Lessee who happens to run a hostel under the name of registered education trust. Can the Lessor collect the service tax on the rent from the Lessee or is there any expemtion for education trust not to pay ST to the Lessor?
-Bharath
Renting of immovale property to an educational institution is exempted vide notification no 25/2012 dated 20/6/2012.
Sir,
But as per to the vide notification no. 3/2013-ST dated 1.3.2013 in which SL. No. 9 has been modified as below which say the if the rention og immovable property to education service which is used providing only exempted services is not taxable.
Now, the question is if the rented property is used for "Hostel" purpose, does this come undr exempted services?
“9. Services provided to an educational institution in respect of education exempted from service tax, by way of,-
(a) auxiliary educational services; or
(b) renting of immovable property;”
Thus, after this amendment, only the auxiliary educational services or renting of immovable property will be exempted only if these are PROVIDED TO educational institution which is providing exempted services. Thus, w.e.f. 1.4.2013, if the educational institution is service recipient of auxiliary educational services or renting of immovable property services, then only, the exemption will be applicable.
Since the hostel will not come under the category of "educational institution providing exempted service" there is no exemption from service tax to the provider of renting service in such a case.
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