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

[Asked by 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

Reverse charge on rent may apply where a director supplies office premises, obligating the company to pay and claim credit.
Where a director supplies renting of immovable property to the company, the recipient company is liable to pay service tax under the reverse charge mechanism with no threshold exemption; the tax so paid may be claimed as CENVAT credit or handled through the Input Service Distributor mechanism. Contractual form - a contract with the director in his individual capacity supplying rent to the company - falls within reverse charge scope, and a provider's lack of registration or sub-threshold value does not negate the recipient's reverse charge obligation if statutorily imposed.