Service Tax Set off

This query is : Resolved

lalit kumar sharma (Querist)
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07 February 2008 My building owner want to claim service tax from June '2007. But he has registered his service tax on Feb 2, 2008. But now he want to add service tax on rent from June '2007 and we have already booked rent and paid cheque without service tax also paid him on monthly basis. Now can we take set off this service tax (June '2007 to Jan '2008).

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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07 February 2008 1. The payment of service tax is the responsibility of service provider. If he claims service tax for the omitted period and if you are willing to accept the arrears bill, it is a matter between you and him,and it is upto the owner to handle delayed payment, if any, to the government.

As far as you are concerned, you are going to take credit of service on the basis of his bill which will be raised after 2-2-2008,after the bill is paid by you.

R.V.RAO

R.V.RAO (Expert)
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07 February 2008 IRRESPECTIVE OF THE DATE OF REGISTRATION, IF A SERVICE PROVIDER COLLECTS OR IS ABLE TO COLLECT SERVICE TAX FROM THE SERVICE RECEIVER,FOR A PERIOD PRIOR TO THE DATE OF REGISTRATION ,THERE IS NO BAR ON COLLECTING THE SAME AND THE AMOUNT SO COLLECTED IS LIABLE TO BE DEPOSITED WITH GOVT.
ON YOUR PART, IF THE RENT AGREEMENT IS DATED JUNE O7 AND IF YOU RECEIVE AN ARREAR BILL OF RENT WITH SERVICE TAX ADDED ,YOU MAY COLLECT DIFFERENTIAL TDS (TDS ON TOTAL OF RENT PLUS SERVICE TAX NOW MINUS TDS ON RENT DEDUCTED EARLIER) AND PAY THE NET AMOUNT TO YOUR LAND LORD AND ACCOUNT FOR THE SAME IN YOUR BOOKS ,FINANCIAL YEAR BEING THE SAME.YOU CAN TAKE SERVICE TAX CREDIT IF OUTPUT AND INPUT SERVICES FALL IN SAME CATEGORY OF TAXABLE SERVICES.
R.V.RAO

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Dayal

Dayal (Expert)
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11 February 2008 The credit eligibility is based on payment of service tax by the recepient. In your case you are the recepient and service tax is being paid by you.

You stand eligible for the credit of service tax.

To safeguard your interest on the input credit it would be ideal to seek a copy of GAR7 against which the service tax has been deposited by the owner.

Regarding TDS i agree with the views express by my learned fried Mr. R V Rao