Applicability of Service tax on Renting of Immovable property

[chaganti srinivas]

Dear Sirs, Renting of Immovable property - Based on the judgement of Delhi high court, Kindly provide the present status on the applicability of Service tax on the same. If applicable can i take the exemption of Rs. 8 lacks for calculating the service tax amount during a financial year.

[rishi mohan]

Respected sir, the exemption limit in service tax has been exceeded to "ten lakh" from "eight lakh" since 1st April, 2008 as per notification no.8/2008 of Service Tax.In the said notification, for the words "eight lakh rupees", wherever they occur, the words "ten lakh rupees" shall be substituted. In case of renting of immovable property the case is still pending with the supreme court. But as per Delhi high court service tax is further not applicable on renting of immovable property.We shall wait for the decision from the supreme court, but presently renting of immovable property is totally exempted from service tax.

[Vijay Chitte]

There is no any ammendmend in present taxable services. Delhih HC judgement is still pending in the SC. Being safer side, charge the service tax on renting of immovable property, otherwise, in future, if the Supreme court judgment overuled the Delhi HC hudgment, you have to pay serice tax along with applicable interest also. At present exemption limit is 10 lacks.

[MOHAN S]

Dear Friends The Delhi High Court has categorically held that no coercive steps should be taken and no letters demanding Service tax on Renting of Immovable property be issued by the Department as Hon.Supreme Court has not granted stay of the Delhi High Court Judgement on this issue. The learned Additional Solicitor General appearing for the Baord (CBEC), assured that corrective steps shall be taken by issuing further instructions, in supersession of earlier instructions, to the officers not to write such letters demanding the payment of service tax or threatening coercive steps.

[Rama Krishana]

Now, after reading the proposal made through Finance Bill 2010, the renting of immovable property is liable to service tax with retrospective effect and the decision of Delhi High court overruled through the amendment.

AI Summary

Renting of immovable property: proposed retrospective amendment makes it subject to service tax despite prior high court ruling. The Delhi High Court held that service tax is not payable on renting of immovable property and directed that coercive recovery steps and demand letters should not be issued pending Supreme Court review. The exemption threshold for service tax was increased effective April 2008, but the Finance Bill 2010 proposes a retrospective amendment to make renting of immovable property liable to service tax, potentially overruling the High Court position.