Service Tax can be paid on Rent to the Land Lord by a Educational Institution

[Janaki Ramam Vobbilisetty]

Dear Sir,

plz. clarify that it is required to pay service tax to the land lord on the play ground taken on rent by a Educational Institution ?. I seen that under Mega notification Educational Institutions are need not pay Service Tax on immovable property for the property taken as rent.

[Rajagopalan Ranganathan]

Sir,

According to Sl. No. 9 (b) of Notification No. 25/2012-ST dated 20.6.2012 (with effect from 1.7.2012) only Services provided to an educational institution, by way of,-

(i) transportation of students, faculty and staff;

(ii) catering, including any mid-day meals scheme sponsored by the Government;

(iii) security or cleaning or house-keeping services performed in such educational institution;

(iv) services relating to admission to, or conduct of examination by, such institution.

are exempted. Renting of immovable property (playing ground) to Educational Institution is not exempted under the above Notification.

[PAWAN KUMAR]

Dear Sir,

The reply quoted by Sh.Rajagopalan Ranganathan Sir is correct. service tax is to be charged on such transaction of renting of play ground.

AI Summary

Service tax on rent: renting a playground to an educational institution remains taxable despite education service exemptions. The notification exempts specified services to educational institutions (transportation, catering, security/cleaning/house keeping, admission/examination services) but does not exempt the renting or leasing of immovable property; therefore renting a playground to an educational institution is outside the exempt categories and is taxable as renting of immovable property.