Leviability of Service Tax - Proportionate amount received as rent

[puneet virmani]

p is an C&F agent of a company.Firstly,p has sub let the property to the company wherein rent is to be calculated on the basis of sale i.e 10/=Rs.on per unit sold in a monthby entering into rent agreement.reimbursement of electrical expenses will be made on actual basis.Secendly,handling/service charges are to be recieved by company on the basis of sales.i.e 12/= per unit of sale.Service tax will be leviable on what amount n why.

[Surender Gupta]

Rent received from letting out of a property is not liable to service tax. However, in the present case it must be seen that the rent received by Mr. P is rent or it includes commission also. This is case of facts and to be decided accordingly.

AI Summary

Service Tax Applicability on Rent Received by Agent P: Determining Impact of Commission on Tax Liability A discussion was initiated regarding the applicability of service tax on rent received by an agent, referred to as P, who sublet a property to a company. The rent is calculated based on sales, with additional handling/service charges also linked to sales. The query sought clarity on whether service tax applies to the rent received. The response indicated that rent from property letting is generally not subject to service tax, but it should be determined if the rent includes a commission, which could affect tax liability.