service tax on rent

[pradip patwardhan]

Dear All,

If one partnership firm, given cold storage on rent to one Pvt ltd Company. The said company pays actual Electricity bill, water bill etc. of cold storage, directly to MSEB and Municipality respectively as per written agreement and pay only rent amount to Partnership firm(service provider)for using Cold storage as fixed by agreement. (Amount of rent is more than 10 Lakhs in F.Y.) I want to know, Is only rent amount is taxable under service tax or amount paid to MSEB & water bill is also taxable or not??Kindly clarify… 

Regards

pradip..

 

AI Summary

Service Tax Applicable Only on Rent, Not Utility Bills, in Cold Storage Rental Agreements Above 10 Lakhs Annually A partnership firm rents out a cold storage facility to a private company, which pays the electricity and water bills directly to the respective authorities, while only paying rent to the firm. The rent exceeds 10 Lakhs annually. The question raised is whether service tax applies only to the rent or also to the utility bills. Responses clarify that only the rent amount is taxable under service tax, not the utility bills, as they are reimbursable expenses. However, if the rental agreement includes utilities as part of the rent, then the entire amount may be subject to service tax.