TaxTMI 
TaxTMI 
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?
Renting of commercial land
31 Mar 2009 
2 Replies 
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Renting of immovable property: service tax applies when tenant-built structures change the property's status and are let out.
Whether rent of commercial land attracts service tax depends on the post-construction character of what is let: if the tenant constructs and the letting is of a building or land with structures incidental to use, it falls within the service tax net; if the property remains vacant land within the exclusion, service tax may not apply. The identity of the party who constructs is immaterial; the decisive question is the property's status after construction. (AI Summary)
Whether rent of commercial land attracts service tax depends on the post-construction character of what is let: if the tenant constructs and the letting is of a building or land with structures incidental to use, it falls within the service tax net; if the property remains vacant land within the exclusion, service tax may not apply. The identity of the party who constructs is immaterial; the decisive question is the property's status after construction. (AI Summary)