Service tax ...
Querist :
Anonymous
(Querist) 17 January 2012
This query is : Resolved
Is service Tax Payable on "Income from Commercial Rent " above Rs.10,00,000 /-.
There was a stay regarding the same has it been vacated.Is there any case regarding the same still pending.
From what year this tax is payable and is it payable in installments.
We have not been Registered for the same, should we get ourselves registered now.
Will we get exemption of Rs.10,00,000/- for the first year.
Thanks...
A V Vishal
(Expert) 17 January 2012
In the Finance Act 2011, the clause governing Service Tax on renting of immovable property has been amended and hence all proceedings in this matterbefore the courts have become infructious as a result of which the owners now require to pay service tax accordingly.
Vineet
(Expert) 21 January 2012
The Service Tax on Renting of immovable property has been much debated and litigated issue. The levy was held unconstitutional by Delhi High Court in Home Solution case in March 2009. Appeal of Revenue is pending before Supreme Court.
Thereafter by Finance Act, 2010 definition of service in context of renting was amended with retrospective effect to nullify Delhi High Court verdict. The amendmend was also challenged before Delhi High Court by Home Solution and levy was stayed in May 2010 (the stay which you are referring to).
However, things have changed rapidly thereafter. The High Courts of Punjab and Haryana, Guahati, Andhra Pradesh, Gujarat and Bombay have since upheld the constitutional validity of retrospective amendmend and levy of service tax on rentals. Even Delhi High Court, considered the matter in a 3 member Bench and in September 2011, reversed its earlier decision and upheld the levy.
Now its turn of retailers to approach Supreme Court by way of SLP. The Supreme Court has granted stay from recovery of arrear service tax till 30th September 2011 from appellants provided 50% of such arrear is deposited in three instalment. It has been made very clear that there is no stay against levy of service tax wef 1-10-2011.
As the matter stands today, final word of Supreme Court is awaited in the matter as SLP against both earlier Delhi High Court Decision (which is more or less infructuous considering later overruling by larger bench) as well as multiple High Court Decisions (Bombay in case of Retailers Association of India, Delhi in Home Solutions) are pending for final hearing and disposal.
Querist :
Anonymous
(Querist) 22 January 2012
Thanks for the answer to all ...
From what year this tax is payable and is it payable in installments.
We have not been Registered for the same, should we get ourselves registered now.
Will we get exemption of Rs.10,00,000/- for the first year.
Thanks...
Vineet
(Expert) 27 January 2012
As the matter stands today decided by various High Courts, Service tax on renting is applicable from 1-6-2007.
There is no exemption of Rs 10 Lakh for first year or any other year. Only the service providers providing gross service value upto Rs 10 Lakhs per annum are exempted from service tax. If your rent receipts are more than 10 lakhs in any year, you become taxable.
