Service Tax Liability

[Guest]

I am going to pay ₹ 6,50,000/ to Municipal Authorities to convert my Residential property to Commercial property.

Can I claim this as deduction for computing my Service Tax Liability.

This amount is being paid as Conversion Charges & Parking Charges to Muncipal Authorities.

[KASTURI SETHI]

No. you cannot claim deduction on conversion and parking charges to arrive at Service Tax liability inasmuch as these are not taxes.

[Guest]

I am thankful to all of you who have replied & commented on my service tax liability for exemption on Conversion & Parking charges paid to MCD.

This was a residential property & only after paying these charges to Muncipal Corporation as Conversion Charges & Parking Charges,I am using it for commercial use & hence commercial rent.These charges are not taxes collected by Civic Authorities?

Moreover conversion charges will be deposited every year alongwith Property Tax.

So even that will not be the deduction I can claim?

AI Summary

Deductions for Conversion and Parking Charges Not Allowed in Service Tax Calculations, Clarifies Respondent; Further Queries Raised An individual inquired about claiming deductions for conversion and parking charges paid to municipal authorities when calculating service tax liability for converting a residential property to commercial use. A respondent clarified that these charges are not considered taxes and thus cannot be deducted from service tax liability. The individual expressed gratitude for the responses and further questioned if annual conversion charges paid alongside property tax could be deducted, implying they are not taxes collected by civic authorities.