Service tax on licencing of support services
TH
(Querist) 04 June 2009
This query is : Resolved
Dear Sir,
A, a company has taken a commercial building on lease and in turn licensed it to company B along with support services/ infrastructural facilities. Company A & B have entered into a licence agreement for the support services.
My query is whether it is possible to change the licence agreement into a rental agreement between A & B?. The licence agreement does not mention the aspect of service tax on renting/ licencing of the commercial space. Is it possible to put a clause of rent in the license agreement?
A V Vishal
(Expert) 04 June 2009
Dear TH,
Recently the Delhi High Court has held that Renting of Immovable property is not a taxable service, If you intend changing the agreement for the same I suggest you wait till the final outcome. However, in the query it is clear that apart from renting you are also providing support sevices and infrastructural facilities both of which are taxable services, however in your best interest I suggest you to discuss the issue with your CA and lawyer before taking any further steps.
