The company A is paying a rent of Rs 1.6 Lakh per month from the month of Sep 2008 to an Individual and paid a 10 months advance of Rs 16 lakh which is refundable once the company A moves out fo the rental premises. The liability of paying service tax was company A responsibility.
By the financial year ending of 2009-2019 i.e upto 31 March 2009, the rent was Rs 11.2 Lakhs. The Company A did not pay service tax.
The company A will be vacating the premises on March 2, 2010. The rent underwent an annual increase of 5% from the month of Aug 2009. Hence the total rent paid by 2 March 2010 will amount to Rs 18.16 Lakhs.
Since the company A has not paid the Service tax, following are the questions:
a. how much should the individual collect the amount from Company A and remit it to the government?
b. Does the answer in point a include the penalty since no service tax was paid in the FY 2010 i.e. March 31, 2009?
c. Does the service tax calculation comes into force after the exemption of Rs 10 Lakh. If so would the service tax calculation upto 31 March 2009 would be 11.2 Lakh - 10 Lakh? Also what would the penalty be and how would this be carried into the next financial year
d. What would be the calculation for the current financial year?
Thanks,
Rah
CAclubindia
