service tax paid on value after abatement

[S.C. WADHWA]

Dear Experts,
Dear Experts, We are issuing invoice on tenant for Rs. One lac per month with break up as under:-
Rent amount ₹ 89000/- Plus service tax @12.36% ₹ 11000/-. But we are depositing
service tax of ₹ 10780/- after getting abatement of house tax paid ₹ 2000/- per month,
And by the end of the year we booked misc income ₹ 2640/-. Diff of service tax claimed
and paid.
Now my query is whether this procedure is OK or not. Please give your expert opinion. Regards, WADHWA

AI Summary

Guidance on Service Tax: Deduct Property Tax Before Calculating and Depositing Service Tax on Rental Income. Consult a CA. An individual sought advice on the correct procedure for calculating and depositing service tax on rental income after deducting property tax. The initial query involved issuing invoices to tenants with specific rent and service tax amounts, while depositing a reduced service tax amount after property tax abatement. An expert confirmed the deduction was permissible under certain notifications but emphasized that the service tax charged to tenants must match the amount deposited with the government. The expert advised revising the billing system to reflect proper deductions and tax calculations, suggesting consultation with a chartered accountant for accounting practices.