Service tax on renting of cell phone towers

This query is : Resolved

Y.N.Vinod

Y.N.Vinod (Querist)
Follow

02 July 2010 This is a company dealing with construction of cell phone tower & renting the towers to the telephone service providers.The company is charging service tax on the following-
1. Fixed Rental portion for the tower
2. Reimbursements of diesel and electricity charges from the client

The company is charging Service tax @ 10.3%. Is there an option for the company to opt for compounding or abatement scheme.

Shyam Lal Naik

Shyam Lal Naik (Expert)
Follow

02 July 2010 The company is charging service tax under the category of "supply of tangible goods for use". There is no compound/abetment scheme under this category.

In my view, diesel & electricity charges can be claimed as exempt under pure agent basis. Needs through examination of the contract.