CAN CREDIT BE CLAIMED ON SERVICE TAX PAID ON OFFICE RENT?

[Guest]

CAN A COMPANY CLAIM CREDIT OF SERVICE TAX PAID ON OFFICE RENT (PAID BY COMPANY TO ITS DIRECTORS) ?

DOES THE RENT PAID ON IMMOVABLE PROPERTY COVERED UNDER REVERSE CHARGES MECHANISM?

WHAT IF SERVICES RENDERED BY DIRECTORS IS BELOW EXEMPTION LIMIT, CAN COMPANY BE LIABLE TO PAY SERVICE TAX ON OFFICE RENT PAID.

AI Summary

Company Can Claim CENVAT Credit on Director's Office Rent if Contract Includes Rent Payment, Not Under Reverse Charge. A company inquired about claiming credit for service tax paid on office rent to its directors and whether such rent falls under the reverse charge mechanism. It was clarified that credit can be claimed via the ISD mechanism, and renting immovable property is not covered under reverse charge. If services are below the exemption limit, the company is not liable for service tax. However, an excise audit raised concerns about non-payment of service tax under reverse charge for rent paid to directors. It was noted that if the contract includes rent payment, the company is liable under reverse charge, and this can be claimed as CENVAT credit.