Service tax input pertaining to earlier period

Rajesh Babu.Durgam (Tax Advisors) (39 Points)

26 November 2014  

Facts of The Issue required Expert\Legal Opinion:

  • We M/s SRI TIRUMALA SAI HOTELS PVT.LTD dealing in multiple activities like Banquet Hall Services, Serving of food and beverages and Hotel accommodation Services in a leased premises since 2004.
  • Since inception we are paying service tax on Banquet Hall services and also paying for other services from the date of inclusion of services under purview of Service Tax promptly.
  • Now issue under ambiguity is that in our lease agreement for premises we have a clause that liabilities in the form of taxes raised in pursuant to any law that should be borne by Tenant (our self). So, based on that clause we have reimbursed service tax portion of the rent for the period 2004 to 2012 amounted to Rs.50,00,000/- (Rupees Fifty Lacs Only) on rent paid for the same period to our Landlord as he wants to clear his dues through VCES Scheme. Earlier, no such claim made by landlord.
  •  Clarity needed on the above point is that:

Can we take above mentioned service tax portion reimbursed to landlord as input for current period?

If it can be taken up to what extent we can take and what are the supporting we need to keep with us for future correspondence.