Service tax on renting of residensial unit

[Jignesh Patva]

Whether service Tax will be levied on renting of residential unit to a pvt. company who further giving such rented residential unit as Paying Guest or consider as in negative list service?

[PAWAN KUMAR]

Dear Sir,

Service tax is exempt on property rented for residential dwelling purpose as per section 66D (m) of Finance Bill 2012-13-

(m) services by way of renting of residential dwelling for use as residence;

[Rajagopalan Ranganathan]

Sir,

With due respect to the views of Shri. Pawan Kumar, my view is that since you are renting the premised to a private Company it will be treated as for commercial purpose. Therefore you are liable to pay service tax on the rental amount received by you provided the total annual rent exceeds ₹ 10,00,000/-.

[Vijay kumar]

Please check in your case whether the renting is "for use as residence" as has been specified under Section 66D. If the unit is used for residential purpose, it is covered under Negative List. Paying guest accommodation should be treated as use as residence - should be under negative list, in my view

[CSSANJAY MALHOTRA]

Dear Friends,

Usage of property needs to be seen irrespective of whether the same is given to Individual or Companies. Property meant for residential use is exempt from Service Tax. Important are the clauses and scope mentioned in the Rent Agreement, please have a look at same.

Views of Sh. Rajagopalan would stand applicable if the Terms of Agreement clearly spell out or reveal the facts that the property given to company is for use in "furtherance of business or profession''

[Mohit Himmatsinghka]

Dear All,

What is Important is the nature of the Service Provided and not the Status of the Service Receiver, unless otherwise specified.

Thanks

AI Summary

Renting of residential dwelling exemption: actual residential use determines service tax liability, not the tenant's corporate status.
Service tax liability on renting depends on the nature of the service and actual use of the property. Renting for use as residence, including paying-guest accommodation, is exempt under the negative list. Taxability arises only if the rent agreement or facts demonstrate use in furtherance of a business or profession; the recipient's corporate status alone is not determinative. Examination of contractual terms, actual usage, and applicable taxability thresholds is required.