INPUT CREDIT

[janakiram g]

Sir /Madam
Our company ( general insurance company ) taken office premises on rent. At the time of agreement, there was no mention of ST on rent. Susequently, landlord ( service provider ) has become Assessee for ST and has obtained registration certificate in the month of Dec 2013. Landlord was asked to pay ST from the year 2010 and he has informed us that he has paid ST for earlier years. Now, landlord asking us to pay ST on rent from 2010. I need clarification on the following 1. can we pay ST for earlier years. Is it in order to pay ST for earlier years when he has obtained registration cerficate in 2013. 2. Rental Agreement is silent on ST portion on rent. In that case, do we need to pay ST. 3. In case, ST needs to be paid, what are documents needs to be obtained. How to verify that landlord has paid ST for earlier years ie from 2010. 4. If ST is required to pay for earlier years as well as for current year, can we claim ST amount as input credit. Is there any time limits for claiming input credit. I was informed that input credit on rent paid for premises needs to claimed within 6 months from date of invoice raised by service provider. Is it correct. In that case, if we pay ST pertaining to 2010, can we claim as input credit

 

AI Summary

Service tax liability on rented premises may fall on the recipient even if the lease is silent, affecting input credit entitlement.
Service tax on rented office premises may be treated as a statutory liability of the recipient where the landlord did not separately charge tax; valuation rules determine whether quoted rent is inclusive of tax and deductions for property tax affect the tax base. If the landlord is assessed for prior periods after belated registration, recovery actions can preclude the recipient from claiming CENVAT credit on renting services. Recipients should obtain the landlord's registration proof, tax payment evidence and invoices, and negotiate allocation of tax and credit entitlement before disbursing past-period tax.