Business Centre Income

This query is : Resolved

N Mohan (Querist)
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24 January 2011 A partnership firm having Business centre income. Agreement entered into an Individual who has taken Business Centre partly and pays Srvice Charges for the space and for the various amenities provided such as Furniture, Office Equipment and Computers.

A sum of Rs. 625000 is charged for office Space and an amount of Rs.280000 is charged for the amenities for 52 weeks ending 31.3.2011.

As per the Business Centre agreement, Rs.7.05 lacs is payable for 1.4.2011 to 31.3.2012 for the service charges towards Space and Rs.3 lacs is payable.The total amount comes to Rs.10.05 laks.

Kindly clarify as to applicability of Service Tax and under which category.
Also clarify,if applicable, when the Service Tax Registration is to be complied with.
I welcome answers from any member so as to enable me to comply with the Service Tax Act & Rules.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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25 January 2011 Service tax applies under the head renting of immovable property.

However in your case total rental amount is less than 10 lacs , you will get the exemption.

You hav to apply for ST registration since total amount is crossing RS. 9 lacs limit.

N Mohan

N Mohan (Querist)
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25 January 2011 I have concern as to classification of Service Tax. In income Tax, it is treated as Business Income and not Income from Property. Hemce, Income from Business Centre may have to be treated as BAS under Service Tax. Require experts opinion.
Also, how much income will be liable for service tax.
Is it possible to treat Office Space Charges as Rental from Immovable property and Other Service charges on moveable assets not liable for Service Tax?

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