Whether rental income is attract service tax,

[Asked by Guest]

Dear Sirs,

We are the group of companies having two plants in nearby distance with different registration, due to shortage of space one factory has given some ware space to another by preparing lease agreement on token amount as rent, this amount has been reflected in balance sheet as rental income, which is less than 2 lacs yearly,

Please advice whether the leassor factory is liable to pay service tax ? if yes then Leasee can take credit of this service tax ?.

Request to suggest your expert advice on this issue please.

Thank you,

Mitesh

AI Summary

Taxability of commercial rent: commercial renting attracts service tax unless aggregate taxable services fall below exemption threshold.
Commercial renting of immovable property is taxable as Renting of Immovable Property, except when the provider's aggregate value of taxable services across all premises does not exceed the exemption threshold in the preceding year; the exemption applies to aggregate taxable services from all premises, and prior-year aggregate turnover (including other taxable activities) determines eligibility for the threshold exemption.