TaxTMI 
TaxTMI 
One of my client is a partership firm which runs a authorised service station as well as dealership of reputed four wheeler co. It gives rent for workshop and showroom for cars. It pays service tax on the rent paid to owners. Now my question is whether it can set off service tax paid on rent ( workshop as well as showroom) from serice on which it receive service tax ( authorised service station and business auxilary services). Whether it can set off service tax on rent paid for both ( showroom as well as workshop) even if it received input service tax from workshop only.
Set off of service tax paid on rent
16 Nov 2009 
2 Replies 
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Service tax credit on rent can be set off but must be apportioned when turnover mixes taxable and non taxable supplies.
Service tax credit for rent paid is available for set-off against output service tax provided invoices and naming requirements are met; where premises are used for both taxable services and non taxable trading, the credit must be apportioned and limited to the portion attributable to taxable turnover, yielding a proportionate credit based on the ratio of taxable to total turnover. (AI Summary)
Service tax credit for rent paid is available for set-off against output service tax provided invoices and naming requirements are met; where premises are used for both taxable services and non taxable trading, the credit must be apportioned and limited to the portion attributable to taxable turnover, yielding a proportionate credit based on the ratio of taxable to total turnover. (AI Summary)