service tax on renting to government

I am not aware of any such circular exempting the rent to Govt dept. Since these could have been issued anywhere across India anybody has the same can post. It maybe noted that the SC in the case of Ratan Melting Industries has held that circulars which are not in line with the provisions are no est in law and therefore relying on the same could be dangerous.

However the commercial buildings may in normal course be liable whether let out to Govt or others where there is a presumption that the same is for commerce. However if it can be proved that it is not for use in furtherence of business or commerce then the coverage under this head can be avaoided.

Sir,

Thanks for your reply.

If you could refer to the letter no.137/280/2007 dated 17 December 2007 and the link https://www.taxmanagementindia.com/Site-Map/Service-Tax/List_Circular.asp?year=2007      regarding the applicability of service on leasing/renting to government offices.

Also let me know to whether the decision passed by the Delhi court stands good in this issue.

With Regards,

Mukunda

Governance is neither a business nor a commerce- that way there should not be any service tax.

The DHC decision deals with whether pure renting is a value added activity or not and comes to a conclusion that it is not. Further that only services in relation to renting are liable not renting itself per se.