SERVICE TAX ON RENT RECEIVED

[VINAY PODDAR]

Dear Sir,

we have given our office premises on rent in FY 2013-14 to till date but unfortunately not charged service tax on rent.

In FY 2016-17 we have noticed the same and paid the service tax liability with interest and penalty as per law.

My question is can we claim service tax pertaining to FY 2013-14 to till date now fm the tenant? Is it any notification for the same?

Please help me.

Thanks & regards

Vinay

[Ganeshan Kalyani]

Sir , it depends upon your terms and conditions with the tenant . The consideration can be inclusive of service tax or service tax extra. So, you need to see your agreement clauses on taxation .

[VINAY PODDAR]

Dear Sir,

Thanks for your reply,

As per agreement the rent is exclusive of service tax and we can charge service tax extra.

Problem is that fm FY 2013-14 we have not charged service tax to the tenant now we have paid the service tax liability with interest and penalty as per law.

My question is can we claim service tax pertaining to FY 2013-14 to till date now fm the tenant? Is it any notification for the same?

Please help me.

Thanks & regards

Vinay

[Ganeshan Kalyani]

Yes you can very well raise supplementary invoice and collect service tax component right the year that you have mentioned. Supplementary invoice is valid.

[VINAY PODDAR]

Dear Sir,

Thanks for your advice.

But the tenant is asking for some notification/circular for the same.

can you please help me out.

thanks & regards

vinay

[Ganeshan Kalyani]

Your agreement is a strong base. As the tenant has agreed to pay service tax extra, he /she need to pay the tax separately if not paid earlier.

[Ganeshan Kalyani]

Also refer

Rule 9 - Documents and Accounts - Cenvat Credit Rules, 2004

AI Summary

Recovery of service tax on rent permitted by raising supplementary invoice where lease agreement states rent is exclusive of tax.
If a rental agreement states rent is exclusive of service tax and tax is chargeable extra, the landlord may raise a supplementary invoice to recover unpaid service tax from the tenant for earlier periods; the contractual tax allocation is the basis for recovery even if the landlord has already paid the liability with interest and penalty. Rule 9 of the Cenvat Credit Rules, 2004 is a cited reference on documents and accounts for tax adjustments.