Service tax on renting of immovable property

This query is : Resolved

CA Sanjay Baheti (Querist)
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12 October 2012 one of my client being an Individual has owned a Commercial Property i.e. Factory Premises which he has given on Rent to 2 concerns & getting Rental Income from them. Both Concerns are engaged in Manufacturing Activities & Proprietorship Concerns. During F.Y.2012-13 i.e. period up to Sept,2012 his Rental Income exceeds Rs 9 lacs. Hence he has to register with Service tax Deptt & to obtain STC No.

Now the query as under:-

i) Whether My client can claim SSI exemption Limit up to Rs.10 Lacs so far taxable Service i.e. Renting of Immovable Property is concerned.

ii) whether both Concerns being manufacturing can claim the Cenvat Credit as to Service Tax Paid on Renting of Immovable Property based on Bill/Invoice issued by the Property Owner & showing separately Service Tax on Rent of Immovable Property.

CA MOHIT GOHLYAN

CA MOHIT GOHLYAN (Expert)
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12 October 2012 1. Yes your client can claim SSI Exemption limit upto Rs. 10 Lacs. Please note that Property Tax paid by your client shall be excluded while calculating the taxable amount.

2. Yes both the concerns can claim cenvat credit.