service tax on rent or royality charges paid

This query is : Resolved

peena (Querist)
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04 February 2009 We are taking over management of running hospitalwhich ready posstion on paying rent or royality or monthly consideration of Rs. 3.60 lacs per month The owner / landlord is demanding to pay us extra the service tax on rent or monthly consideration @ 12.36%
can we get input credit of the service tax paid to landlord
are medical services or part of it such
room rent admission fees , operation theture charges etc under service tax and if yes under which code
also i want guidence how to structure the agreement whether it should be rent agreement or roalytee agreement etc

vipin

vipin (Expert)
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04 February 2009 in case u take the hospital on rent service tax is payable on rent

service tax is not leviable on medical service till date so no service tax input service credit will be available

then it will be better u take the hospital on the basis of royalty payment in that case u r liable to deduct tax u/s194J @10%+surcharge if applicable+edu cess from the payment u will made to the landlord.

cavipin garg
partner,
KVR & Co.
Chartered Accountants
B-2/1 Ashish Complex LSC,
New Rajdhani Enclave,
Vikas Marg Delhi-110092
kvrco@in.com
Tax, Assurance, Consultancy, ROC, STPI/ SEZ