Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Rent - sharing among group companies

RAJENDRA PARAKHI (MANAGER-FINANCE & ACCOUNTS) (60 Points)

07 October 2010

Parent Company pays rent to the owner of the Premises and he is charing Service Tax correctly.

Premises are shares by some of the group companies and parent company raises debit notes on them for recovery of rent for the preportionate area used by them

Is parent comapny required to charge Service Tax in the debit notes raised on Group companies ?

Please help me in this matter.

Rajendra

Reply
Follow
Share

1 Replies

karan challani (article) (82 Points)
Replied 08 October 2010

It would be better if the owner of the property raised different rent receipts in each company name.

if this is not possible the parent company has to distribute proportionate amt of service tax to its sharing companies.

i would like to know is TDS is deducted on the amount paid to the original owner.Is the owner a individual or a Company.IF TDS is deducted who is deducting the TDS.