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Rent on Service Tax

Harish Eknath Suvarna (Accountant) (36 Points)

07 December 2009

is service tax is applicable on Commercial Rent.?

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4 Replies

CA Vishal Sormare (CHARTERED ACCOUNTANT) (130 Points)
Replied 07 December 2009

No, Service Tax is not applicable on commercial rent.

Please read notifiacation no. 24/2007 -st dated 25 may 2007

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Ansari (ca final) (444 Points)
Replied 07 December 2009

Originally posted by :CA Vishal Sormare
"	No, Service Tax is not applicable on commercial rent. Please read notifiacation no. 24/2007 -st dated 25 may 2007	"

Shyam Lal Naik (Service) (6156 Points)
Replied 08 December 2009

Recently, the CBEC has issued a circular that the matter of Service Tax on Rent has not attained finality and is pending with Supreme Court.

The Board has advised the field formation to take steps to protect the revenue.

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 09 December 2009

The issue on rental on commercial rent was decided by the Delhi HC as not applicable due to two reasons primarily:

1. No value add in activity of pure renting

2. The service of renting is not in relation to renting

The aspect of constitutional validity was not examined.

Against this decision the dept went to the SC and we understand that the stay of the decision was also prayed for but not grnated. However the petitin was admitted.

Therefore it appears that the issue seems tobe favouring the tax payer substnatially. If paying pay under protest. If not paying intimate dept the reason and also take undertaking from the tenant.