Service tax on rent

Querist : Anonymous (Querist) 20 May 2010 This query is : Resolved
If a landlord has not collected and not paid any service tax on rent in light delhi HC judgement and filed return as nil with foot note that service tax not applicable in light delhi HC judgement.Now in light of finance act 2010 what is the liability of land lord in following conditions.
1.Service tax not collected
2.tenant has already left.
Plese through the light on this

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A V Vishal (Expert) 20 May 2010
The liability is still on the landlord and the revenue can collect the dues irrespective whether the landlord has collected the service tax or not and whether the tenant is there or left the premises.

Vineet (Expert) 21 May 2010
Do agree with Mr Vishal. The liability to pay service tax is on service provider and therefore the fact that the tenant has left does not have any bearing on the same.

In most cases the landlords had taken precautionary measures such as security, undertaking from tenant as the matter was still sub-judice.

Sumit Batra (Expert) 22 May 2010
The onus to pay service tax is on service provider and therefore, the fact that the tenant has left does not have any bearing on the same.

In most cases the landlords had taken precautionary measures such as security, undertaking from tenant as the matter was still sub-judice.

However, for your information, Delhi HC on 18.05.2010 has again granted stay in imposition of Service Tax on Renting of Immovable Property Service in light of amendments made in Budget 2010. So, you can obtain stay and not pay Service Tax.

Normally landlords are taking an undertaking from the tenants that in case in future Service Tax is held to be justified on Renting of Immovable Property then the TENANT IN POSSESSION during the relevant period shall pay the Service Tax.

Vineet (Expert) 23 May 2010
I think the stay is specific to Home Solutions and not applicable to other parties unless they seek similar relief in the court.

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