Reverse charge of service tax

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2012 Our co. is paying office rent to one of its director...and also co. is paying service tax on rent to department as service receiver and has file ST-3 as a service receiver under the category of 'Renting of Immovable Properties'...Is it right?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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21 November 2012 You are liable for service tax under reverse charge but now there is no concept of category wise service tax.
Only one category "Services other than in negative list" is there.

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2012 Sir you are not getting my point...i know negative list has been introduced and now all services are taxable...but this is not my question...
I am asking whether rent is covered under reverse charge mechanism?

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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21 November 2012 yes.. it is also covered under reverse charge.
"Any Service provided by Director is covered under reverse charge"

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2012 thanks sir.....but our taxation manager has a given a different reason....he says that as our company is also providing services to other persons and is registered so the company is under obligation to pay service tax on other srvices also as a service receiver....i.e. we have to pay service tax on the service received besides services provided

Viral Vora

Viral Vora (Expert)
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21 November 2012 First of all it should be cleared that renting of immovable property is declared service under section 66E(a). Hence even though rent of immovable property is provided to director, it is directors responsibility to make payment of service tax and no reverse charge mechanism is applicable.

Besides, Any service provided by Director is covered under reverse charge. But here by renting the property director is not providing any service.

Hence i am of the opinion that you need not required to pay service tax under the category Renting Of Immovable Property for the said immovable property.

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2012 Mr. Viral Vora could you please explain why the director is not providing any service by renting an immovable poperty to company?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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21 November 2012 If the Director is not providing the service then who is the service provider????

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Querist : Anonymous

Querist : Anonymous (Querist)

22 November 2012 Mr. Amit now one more confusion arises....in my view services provided by director only in professional capacity is taxable not other than that....