Seema Jain (Partner) (63 Points)
23 April 2010Dear Professionals,
One of my client is registered under renting of immovable property services... he collect the rent for the 10 months but didnt collect rent of last two month n desire to adjust rent against rental deposit...what to do for service tax. whether to take rent as inclusive of service tax or charge service tax seperately.??
pls reply
vishnupriya
(CA Final)
(1418 Points)
Replied 24 April 2010
Hi!
Adjusting of Rent into rental deposit indirectly mean receipt of rent. When the service provider fails to realize or charge the service tax, then the amount so realized/charged shall be considered as amount inclusive of service tax.
Conclusion: Your client should pay service tax by calculating the rent received as inclusive of service tax.
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