Renting of commercial land

[Suhit Aggarwal]

Whether service tax is payable under the category ' Renting of Immovable Property' for renting of commercial 'Land' on which tenant will build its own building? Will it be cover in exclusion in explanation 1 to immovable property for vacant land, whether or not having facilities clearly incidental to the use of such vacant land?

[Ravi Chopra]

if you have permitted the construction on the land, the same would be covered within the purview of service tax net as soon as building would be constructed.

[Guest]

I think, you should ascertain that after construction of building, by the tenant, whether the status of the property would remain same or not. it is immaterial that who is constructing. What is material is that what is let out. The issue of status must be decided first.

AI Summary

Service Tax Applicability on Renting Commercial Land: Key Factor is Property Status Post-Construction, Not Who Constructs. A query was raised regarding the applicability of service tax on renting commercial land where the tenant constructs their own building. One response indicated that if construction is allowed, service tax would apply once the building is constructed. Another response emphasized the importance of determining whether the property's status changes after construction, as the key factor is what is being rented, not who constructs it. The discussion highlights the need to assess the property's status to determine tax liability.