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Service tax on rent

suneet (manager`) (33 Points)

24 April 2011

What is the latest status of service tax on rent of immovable property in Supreme Court?

Whether service tax officers are empowered to collect service tax from landlord?

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4 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 25 April 2011

Originally posted by : suneet

Hi
What is the latest status of service tax on rent of immovable property in Supreme Court?

- SC has made stay on service tax collection on rent, matter under juridiction of law.

Whether service tax officers are empowered to collect service tax from landlord?

- NO body is empowered to collect servicetax against laws, u can submit a letter to department stating the fact that you are not collecting the service tax under the SC verdict and are abide by to collect and pay the same if the verdict of court goes in favor of servicetax, duly signed by landlord and tenent both.

- department may issue show cause notice to you for non payment, if u submit the above statement then they would go in long silence.

- in case department wins, then u have to pay the service tax whole liability.

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RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 30 April 2011

The verdict from the Apex court is pending. It will take time. In the meanwhile, the department has made necessary amendment in the Service tax Act and Rule with retrospective effect and issued SCNs to various assessees to pay back the service tax on "renting on immovable property" wtih penal interest.

So, unless the Supreme court decides the matter in favour of the Assessee, the liability will be more for the persons who have not remitted the service tax based on Delhi and Bombay High Court decisions.

In southern states, few asseessees have started paying service tax on renting of immovable property "under protest".

Let us wait for the historical judgment from the Hon ble supreme court.

rengaraj.r.k

Ashish Saxena (Acct Officer) (21 Points)
Replied 01 August 2011

if we are getting the rent more that 10 lakh from 3 shops in a year. is all shopkeeper has service tax libality ???????

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 02 August 2011

Hearing before Delhi HC has been concluded and order has been reserved. The exemption of Rs.10L landlord centric and he has only one exemption irrespective of number of premises.