Service Tax on Rent

This query is : Resolved

Sanjeev Khandelwal (Querist)
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25 August 2007 Hi Expert,
My client has given his palace on 99 years lease to a Hotel Co.alongwith other valuable antique items in lumpsum amounting to Rs.48,00,000/- PA and also same was in last year too. Please let me know wheather my client requires to take service tax No. and has to deposit service tax and please let me know the procedure I had to follow.

CA Prasanna Krishnan V

CA Prasanna Krishnan V (Expert)
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26 August 2007 Dear Sir

Under Sec 65 (105) (zzzz) of the Finance Act 1994 'residential accommodation such as hotel, hostel...' are excluded from service tax ambit.

In practice hotel tenants/lessee agree for major portion of rent towards their accomodation area when very less is towards their admin and food court areas.

Please be clear of the fact that the whole residential accomodation area of your hotel tenant is outside service tax purview.

Sanjeev Khandelwal

Sanjeev Khandelwal (Querist)
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27 August 2007 Thank U

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