SERVICE TAX ON RENTING OF IMMOVABLE PROPERTIES

[abbas mukhi]

SIR,

OUR ORGANIZATION IS PROVIDING LAND ON RENT (SOMETIMES RENT ARE NOMINAL OR FAR BELOW MARKET RENT) FOR UNDER MENTIONED PURPOSES.

1. RELIGIOUS PURPOSE

2. FOR SCHOOLS

3. HOSPITALS

4. PUBLIC GARDEN ETC.

5. SOCIAL AND CULTURAL ACTIVITIES

6. VARIOUS FARES AND EXHIBITION FOR SHORT TERM PERIOD

7. TO GOVERNMENT FOR VARIOUS PURPOSE

8. RESIDENTIAL PURPOSE

9. COMMERCIAL PURPOSE

STATUS OF OUR ORGANIZATION IS AUTONOMOUS BODY/BODY CORPORATE

PLEASE GUIDE US ON LIABILITY OF SERVICE TAX FOR LAND GIVEN FOR ABOVE MENTIONED PURPOSE.

THANKS

AI Summary

Service Tax Applies to Commercial Rentals; Exemptions for Religious and Educational Use Discussed; Co-ownership Tax Liabilities Highlighted. An organization sought guidance on service tax liability for renting immovable properties for various purposes, including religious, educational, and commercial uses. Responses highlighted that service tax applies to renting for commercial purposes, while exemptions exist for religious purposes and residential use, provided it's not for business. Renting to educational institutions may be exempt, but not for hospitals or gardens. The discussion also covered complexities around rental agreements involving furniture, where separate agreements could lead to VAT and service tax implications. Additionally, the service provider is generally responsible for collecting and remitting service tax, unless specified otherwise. Concerns about co-ownership and potential tax liabilities were also addressed, with a notice suggesting that rental income from co-owned property could be taxed collectively as an Association of Persons (AOP).