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 on rent: characterize payments to determine if they are rent or taxable commission under service tax rules. The key legal point is that rent received from letting out of a property is not liable to service tax, but where payments described as rent may include commission or remuneration for services, their true character must be determined on the facts to assess service tax liability.