Old age home/care homes

[anish mital]

Will letting of old age homes or care homes be covered under entry (m) of 66 D of Finance Act 1994.

other relevant facts:

1. Cooking not allowed. food is served 3 times.

2. Personal attendant is available for needy.

3. Dinning facility is common for all.

4. washing Bathing common for two premises.

[Rajagopalan Ranganathan]

Sir,

Liability to service tax depends on the fact whether the old age home or care home is maintained on charity or with commercial intent. If it is run on commercial basis then it will not fall under entry (m) of Section 66 D of finance Act. Normally a house which is let out for residential purpose cannot be considered as commercial purpose though the owner earns rent as income.

[PAWAN KUMAR]

Dear Sir,

The reply given by Sh.Rajagopalan Ranganathan is correct.

[DR.MARIAPPAN GOVINDARAJAN]

Thanks to Shri Rajagopalan Ranganathan.

AI Summary

Service tax liability hinges on commercial intent; charity-run old age homes may avoid service taxation under exemption criteria. Liability to service tax for letting old age homes or care homes depends on whether the home is maintained on charitable grounds or with commercial intent; if run commercially it will not fall under the exemption entry, while accommodation let for residential purposes is generally not treated as commercial solely because rent is received. Relevant factual features such as provision of meals, personal attendants, and common facilities are material to that classification.