TaxTMI 
TaxTMI 
I have paid an amount to Muncipal Authorities for conversion of land use.
Can I claim deduction for this amt while computing my servicetax liability.
Rent for commerciasl property
16 May 2016 
12 Replies 
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Guest 
Deductibility of conversion charges: municipal conversion fees are not deductible against service tax liability on rent.
Conversion charges levied by municipal authorities for change of land use are treated as fees or municipal charges, not taxes, and therefore are not deductible from gross receipts when computing service tax liability for the renting of immovable property service; property tax, however, is an allowable deduction. Some contributors regard conversion charges as capital expenditure (often one time), but the querent reports annual payments-regardless, conversion charges do not qualify as deductible taxes for service tax purposes. (AI Summary)
Conversion charges levied by municipal authorities for change of land use are treated as fees or municipal charges, not taxes, and therefore are not deductible from gross receipts when computing service tax liability for the renting of immovable property service; property tax, however, is an allowable deduction. Some contributors regard conversion charges as capital expenditure (often one time), but the querent reports annual payments-regardless, conversion charges do not qualify as deductible taxes for service tax purposes. (AI Summary)