Variable service tax

[S.C. WADHWA]

Dear Expert,

We are getting advance fixed rent of building in the first week of every month from tenant. Rent is to be received by an individual salary person. Tenant also pay us 5% variable rent in the following month of his sale of the previous month. Now my query is variable rent which we will received in the month of April but pertains for the month of March, in this case the service tax on this variable amount when to be deposited. We are paying service tax on quarterly basis. Please confirm.

REGARDS,

WADHWA

[Mahir S]

on receipt of variable rent, service tax thereon is to be deposited

AI Summary

Variable rent service tax must be deposited on receipt, even if it pertains to an earlier month, for quarterly filers. Variable rent received by a landlord gives rise to service tax liability at the time of receipt; tax must be deposited when the variable amount is received and included in the payment/return period covering that receipt, even if the amount pertains to an earlier month.