St on renting of immovable property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 October 2012 If a pvt ltd company engaged in providing output service has taken a residential property on rent from an individual for commercial purpose, is service tax payable by the company & if it is payable whether the cenvat credit can be utilized for paying any other service tax liability?????????

CA Suresh Jain

CA Suresh Jain (Expert)
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14 October 2012 As per 66E renting of the Immovable property is a declared service. As per negative list the renting of residential dwelling unit is not a taxable service only if it is used as a residence. In view of this the transaction mention by you is liable to service tax.

The CENVAT credit is available and can be utilised for payment of service tax payable by the Company except payable under RCM

Querist : Anonymous

Querist : Anonymous (Querist)

14 October 2012 Sir it is not very clear to me....could you please elaborate on the rcm & is renting covered under rcm.
& can service tax paid on rent be adjusted with the other service tax liability because as far as i know one can utilize the cenvat credit of service tax payable only after it has been paid but since the company is providing output service it has no way to avail the credit.......Thanking in anticipation.....

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CA Suresh Jain

CA Suresh Jain (Expert)
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15 October 2012 RCM is not applicable to your transaction.
the CENVAT can be availed by you