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Service tax on renting of immovable property

ravi chauhan (Internal auditor) (59 Points)

25 October 2016

I have a query in regards to renting of Immovable Property. My company has provided a land on lease to a company. The payment of lease were received annually in september every year. And as per agreement, my company issues a single bill for the lease every year. now during service tax audit by department. they are demanding interest for not paying service tax on monthly basis. they consider it in continious supply of service. Department considers it as a default. is it necessary to issue monthly invoice? is it valid?

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 30 October 2016

When the service tax for the rent paid? If in the beginning of the year, only returns are to be revised.

ravi chauhan (Internal auditor) (59 Points)
Replied 11 November 2016

service tax is being paid in september every year.

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 14 November 2016

The earliest of the 3 events for normal transactions: receipt of payment, billing or completion of service. As no billing or reciept and as per contract it is September. Not required to be paid earlier.

It could be said tobe constinuos supply under which also the contract specifying that payment to be made in september would apply unles spayment recived earlier or billed earlier.

Mir Irshad Ali (Partner) (192 Points)
Replied 14 November 2016

Since the contract specifies that the payment of the rent amount is to be made in September every year also the invoice is being issued in september and also payment is being received in september then the point of taxation will be september (5th of Oct.) in the instant case.