10 October 2007
THE CHARGING SECTION UNDER SERVICE TAX ACT SAYS EVERY SERVICE PROVIDER WEF JUNE 07 HAS TO COLLECT SERVICE TAX ON RENTS CHARGED ON COMMERCIAL IMMOVABLE PROPERTY. PL. ASCERTAIN AS TO WHO IS REGISTERED AS SERVICE PROVIDER(S.P),BECAUSE S.P IS LIABLE TO REGISTER HIMSELF UNDER SERV. TAX ACT,COLLECT,AND DEPOSIT THE SERVICE TAX AND ALSO FILE THE RETURNS ON QRTRLY. BASIS. PROPERTY TAX PAID FOR THE RELEVANT MONTH CAN BE DEDUCTED AS OUTPUT TAX FROM OUT OF THE RENT RECEIVED FOR THE RELEVANT MONTH AND ONLY ON THE BALACE RENT SERVICE TAX IS PAYABLE @12.36% . IF THE LIAISON OFFICE IS COLLECTING THE RENTS ON BEHALF OF THE OWNER OF THE PREMISES LET OUT AND THE OWNER IS REGISTERED AS S.P ,THE LIAISON OFFICE MAY COLLECT THE SERVICE TAX @12.36% AND DEPOSIT THE SAME. THE EXEMPTION LIMIT IS RS. EIGHT LAKHS PER ANNUM.BUT THE THRESHOLD LIMIT FOR REGISTRATION IS RS. SEVEN LAKHS. THE SERVICE PROVIDER IS ONLY LIABLE TO PAY SERVICE TAX AND HE CANNOT TAKE THE DEFENCE THAT THE SERVICE RECEIVER HAS NOT PAID THE SERV. TAX APPLICABLE AND HENCE S.P CANNOT PAY. R.V.RAO
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