Ramdas Buran (Asst Manager Accounts) (72 Points)
08 January 2016Dear Sir,
Our company has rented premises for mfg some engg material. We are paying rent to that company under agreement with company. My Querry Is , Do I need to pay Service Tax under Service Tax Reverse Charge Mechanism ?? If yes then under which head ?? Also I want to know Can I take input credit for such service tax ??
Kindly let me know the same ASAP
Thanks
Mayur Kashinpure
(Student)
(341 Points)
Replied 08 January 2016
| Originally posted by : Ramdas Buran | ||
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Dear Sir, Our company has rented premises for mfg some engg material. We are paying rent to that company under agreement with company. My Querry Is , Do I need to pay Service Tax under Service Tax Reverse Charge Mechanism ?? If yes then under which head ?? Also I want to know Can I take input credit for such service tax ?? Kindly let me know the same ASAP Thanks |
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Renting of premise is not covered under reverse charge mechanism. Hence, service provider is liable to pay the full service tax to government.
Further, you are eligible to take credit of service tax paid on rent for the purpose of output tax on manufacture of engeneering material (you may refer Rule 2(l) of Cenvat Credit Rules, 2004.)
Also, you need to deduct TDS @ 10% u/s 194I of Income Tax Act, 1961 if you are paying rent more than Rs. 1,80,000 in an year. Please take note of the fact that TDS is to be deducted on amount exclusive of service tax if the service tax amount is shown seperately.
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 08 January 2016
CAclubindia
