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SERVICE TAX ON ELECTRICITY

(Querist) 02 February 2009 This query is : Resolved 
WE ARE OPERATING PIZZAHUT RESTAURANT IN A FOOD COURT IN A IT PARK

IT PARK HAS OBTAINED ELECTRICITY CONNECTIONS FROM THE DEPARTMENT AND SUPPLIED POWER THROUGH INTERNAL METERS SET BY IT TO FOOD COURT

WE, AS TENANTS OF FOOD COURT RECEIVES FROM AGAIN FROM SUBMETERS

NOW WHEN THE EB DEPARTMENT RAISES BILL TO IT PARK - IT PARKS RAISES DEBIT NOTE TO FOOD COURT OPERATORS AND IN TURN FOOD COURT OPERATIORS RAISES DEBIT NOTE ON US

FOOD COURT ALONG WIHT EB CHARGES PER UNIT ALSO CHARGED SERVICE TAX

IS IT OK ?

TO MY KNOWLEDGE WHEN EB DEPARTMENT IS NOT CHARGING SERVICE TAX TO IT PARK

WHY IT PARK IS CHARGING TO FOOD COURT AND FOOD COURT OPERATORS IN TURN CHARGING SERVICE TAX ON RESTAURANTS.

COULD YOU PLEASE ADVISE

1. SERVICE TAX APPLICABILITY ON EB SERVICE

2. WHETHER ABOVE CASE IS OK


A. A. JOSE (Expert) 03 February 2009
COULD YOU EXPLAIN WHAT IS EB MEANS ?
ravi (Querist) 04 February 2009
electricity bills
KAMARAJ BHARATHY G (Expert) 05 February 2009
that is electricity board. for example TNEB means
TAMIL NADU ELECTRICITY BOARD
M. PIRAVI PERUMAL (Expert) 05 February 2009
PLZ. GIVE THE STATE IN WHICH YOU RUNNING THE BUSINESS.
Ravi Arora (Expert) 05 February 2009
yes mr. kamraj is right

it is Electricty Board, best of my knowledge they are not charging service tax. but first you tell in which state you are
ravi (Querist) 06 February 2009
WE ARE PUT UP IN TAMIL NADU

ELECTRICITY BOARD IS NOT CHARGING SERVICE TAX TO ITS DIRECT CUSTOMER EG : IT PARK

WHERE AS IT PARK IN TURN WHEN WHEN THEY RAISE DEBIT NOTE FOR RECOVERY OF ELECTRICITY CHARGES IN THE DEBIT NOTES SERVICE TAX IS CHARGED

IS IT RIGHT PLEASE ADVISE
A. A. JOSE (Expert) 06 February 2009
Dear Mr.Ravi,

Charging of Service Tax by the IT Park appears to be perfectly tenable as the IT park purchases electricity from the TNEB and thereafter sells the same to the units situated within their IT Park and thereby rendering service falling within the ambit of the service tax provisions of the Finance Act please. Therefore, irrespective of whether TNEB is charging service tax on its consumers or not, I.T.Park who is the service provider in the instant case would be liable to service tax.
DON BOSCO Proprietor of DON As (Expert) 09 February 2009
The matter is very simple. The food court is collecting rent from you along with the Electicity charges and they are making service tax on the overall amount.

Service tax will be charged on renting of immovable property and this includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course of furtherance of business.

According to a senior official, it is only logical to exempt a pure revenue sharing contract without a rental component from service tax. This is because law makers have gone by the principle of Ejusdem Generis-a Latin word "of the same kind" used to interpret loosely written statute. In this case, the phrase "similar arrangement" will cover activities like renting, leasing, letting out or licensing of immovable property.


DON BOSCO Proprietor of DON As (Expert) 09 February 2009
so, you have to give service tax to your land owner and also you are eligibe to take credit.


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