Service tax
Rashmi
(Querist) 01 February 2014
This query is : Resolved
Hi,
We have rented a property and running a fitness centre on it. We have executed a lease deed also. Now the lessor is asking us to pay amount of service tax. In our lease deed, we have clearly mentioned all rates, taxes and cesses with regard to property and incidental thereto shall be paid by the Lessor.
My question is whether, can we construe that "all rates, taxes and cesses" also includes "service tax" and tell the lessor that you are liable to pay.
Rajendra K Goyal
(Expert) 01 February 2014
On the face your version may be true.
For any concrete advise the terms of lease and the language has to be seen.
malipeddi jaggarao
(Expert) 02 February 2014
Service Tax is relating to rental income. All rates, taxes, cess are relating to property.
In the absence of clear clause regarding payment of Service Tax - it is disputable by both. You should come to an understanding and make amendment to the Lease Deed.
R.V.RAO
(Expert) 03 February 2014
i beg to differ from expert sri Jagga rao garu and say that all taxes etc...include any tax, known by whatsoever name.
the queriest may attach his lawyer's written opinion accordingly and send to owner of premises in case the owner sends any written demand.
In all probability ,your owner while sending his rental bill to you, (monthly/ or for any agreed period),will include serv.tax @12.36%(incl.edu.cess) and demand payment.
while sending your cheque for rent payment,again st such bill if any ,pay only actual rent agreed and attach the said lawyer opinion.
be aware
1.) that your premises owner must be a regd.service tax provider under serv.tax act,bearing a regn. number which should be quoted by him on all his bills and letter heads ,correspondence etc....
2.) he must even give you a copy of his serv,tax regn.cert.copy.
3.)his taxable serv.turnover must be not less than Rs 10 lakhs per annum
4.)renting of commercial premises only attracts serv.tax.
i mean if one of the res. flats in an apartment complex is given on rent for fitness centre,he cannot demand serv.tax,unless the premises were declared commercial by muncipality for property tax purpose etc...
queriest is on right path/strong footing. go ahead
