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Service tax on guest house

26 April 2013

Dear Sir

I have a business guest house rented servicese, My question is I have cross a turnover in this year 10 lacs but my guest house Rent is only Rs 500/- per day. can I charges service tax for customer on Rs. 500/- @ 7.42% or not?

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12 Replies

PARMITA MAZUMDER (CA- Practice) (386 Points)
Replied 26 April 2013

The same is covered under the Mega Exemption notification. It says that, services by way of renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purposes, having declared tariff of a room below one thousand rupees per day or equivalent; is exempt from service tax. As you are charging less than Rs 1000 the same is exempt from service tax net.

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Nilesh Takale (MBA) (37 Points)
Replied 26 April 2013

Thanks Parmita, but I have cross the turnover Rs. 10 Lac than also I have not responsibility for collect Service Tax?

PARMITA MAZUMDER (CA- Practice) (386 Points)
Replied 26 April 2013

When you are not covered under the service tax net then why will you collect service tax from the service receivers. 10 Lacs limit is applicable when you are providing taxable services.

Nilesh Takale (MBA) (37 Points)
Replied 26 April 2013

Thank you very much

PARMITA MAZUMDER (CA- Practice) (386 Points)
Replied 26 April 2013

Welcome. Hope ur query is resolved.

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Ashwani Narnoli (.) (1843 Points)
Replied 29 April 2013

Yes, agree with above

Robin Maitra (Manager) (22 Points)
Replied 16 December 2014

We are running a Guest House having 7 rooms and 19 beds.

Since the Guest House is situated near Mother Teresa Home we

mainly cater to Foreign volunteers and NGOs nearby. We are charging

Rs. 500-800 per day per bed without food. Are we liable to pay

Service Tax and If yes at what rate. Our Annual income is less

than Rs. 10.00 lakhs

Please advice

Robin Maitra

Manish K.Gandhi (Superintendent) (966 Points)
Replied 18 December 2014

Plz refer to the answer given above by Ms Prameeta. What is important is Declared Tariff. In case, Declared Tariff is Rs. 1050 and after bargain the same is given at Rs. 800, it is not covered in mega exemption and if such income cross Rs. 9 lakh you have to apply for S.Tax.Registration and on crossing such income Rs. 10 lakh, you have to charge and pay service tax.

Robin Maitra (Manager) (22 Points)
Replied 19 December 2014

What happens when my Declared Tariff is Rs. 500 to 600 per day per bed be it in

a room or in the dormitory. Should I then need to charge Service Tax.

Robin Maitra

Manish K.Gandhi (Superintendent) (966 Points)
Replied 22 December 2014

No S.Tax. Exemption Notification 25/2012-ST dt. 20.06.12 Sr. 18.

18. Services by way of renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purposes, having declared tariff of a unit of accommodation below rupees one thousand per day or equivalent;

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chandrasekaran (audit assistant) (27 Points)
Replied 22 December 2014

Dear Experts!!

Pls clarify my doubt.

An export firm registered as Non-Assessee in service tax, could claim service tax refund

under notification no 41/2012? STC number is mandatory to claim the refund. I think that STC

obtained through non-assessee mode in ACES and getting through AC/DC by filling up Form A2 are serve the same purpose. Also go through the circular no 919 / 09 / 2010 – CX Dt. 23.03.2010 para captioned non-assessee that specifies who can be registered as non-assessee.

Regards,

Chandru