CA. Rachna Parashar (partner) (196 Points)
31 December 2011There is an assessee who is proprietor of a marriage garden and that garden is registered under service tax and depsiting service tax under mandap keeper services but he has another property also which he has given on rent. Will it be also liable for service tax on renting out that property which is totally separate from marriage garden?
suchit shah
(Dy. Manager(Finance & Accounts))
(208 Points)
Replied 31 December 2011
Can u tell which is that property ??? I mean is it also a marriage garden or flat or what????
CA. Rachna Parashar
(partner)
(196 Points)
Replied 01 January 2012
another property is banglow which is totally different from that of marriage garden
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 02 January 2012
Banglow used for residential purpose is not taxable. But taxable if used for commercial purpose.
suchit shah
(Dy. Manager(Finance & Accounts))
(208 Points)
Replied 02 January 2012
Ok so as that bunglow has been given on rent , it wil be taxable under the head house property.........No need to take any Service tax registration for that......
CS Priyanka b.
(student)
(69 Points)
Replied 02 January 2012
if a property(banglow) is used for residential purpose one of d(property) house,flat or banglow is not taxable but if it is rented then it is taxable under d head of "income frm house property"for dat relevant assessment year if it is rented for 300 days or more....as time aspect is also important to know where it should b headed.....
CS Priyanka b.
(student)
(69 Points)
Replied 02 January 2012
dear rachna,
If a property(banglow) is used for residential purpose one of d(property) house,flat or banglow is not taxable but if it is rented then it is taxable under d head of "income frm house property"for dat relevant assessment year if it is rented for 300 days or more....as time aspect is also important to know where it should b headed.....
thanks
CA. Rachna Parashar
(partner)
(196 Points)
Replied 02 January 2012
if other property is not a banglow but shops given on rent and rental income is taken in computation as income from house property. Will it be taxable under service tax ?
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 02 January 2012
Yes rental from shops is liable to service tax . Basic exemption of Rs.10L is available.
CA. Rachna Parashar
(partner)
(196 Points)
Replied 02 January 2012
if rental income is below 10 lacs but income of marriage garden of which he is proprietor is more than 10 lacs which is registered under service tax in the name of marriage garden then will he get bacic exemption on rental income
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 03 January 2012
Only one basic exemption of Rs.10L is available to the proprietor. Commercial rent and marriage garden rent will be aggregated for the exemption of Rs.10L.
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 03 January 2012
No. For the basic exemption of Rs.10L, both commercial rent and marriage garden rent will be aggregated.
CA Prabhat Gupta
(Manager (Indirect Taxes))
(821 Points)
Replied 03 January 2012
Rachna,
Please refer to Point No.2 (vii) of Notification No.6/2005-ST dated 01.03.2005, containing provisions relating to small service providers. The notification was last amended vide Notification No. 8/2008-ST, where basic exemption limit was increased to Rs.10 lacs. The Point No.2(vii) is as follows:
"2. The exemption contained in this notification shall apply subject to the following conditions, namely:-
(vii) where a taxable service provider provides one or more taxable services from one or more premises, the exemption under this notification shall apply to the aggregate value of all such taxable services and from all such premises and not separately for each premises or each services;"
Hence for the purpose of calculation of basic exemption, aggregate value of all taxable services, provided from all premises belongng to the assessee, shall be considered.
Hope this clarifies your doubt. The notification is attached below for ready reference.
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 04 January 2012
No. Both commercial rent and marriage garden rent will be aggregated for the limit of Rs.10L
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
