Change in Budget on 'Renting act' restrospectively - Interest and peanlty on rent not paid earlier

[chaganti srinivas]

Dear Sir, Since there is a change in the Budget on 'Renting act' restrospectively from 1st june'2007 making 'Rent itself is a taxable service' now, Do we need to pay Interest and penalty on the rent whichever is not paid earlier.

AI Summary

Retrospective taxation of renting services may attract interest and possible penalty unless tax and interest paid before notice.
Retrospective amendment treats renting as a taxable service from 1 June 2007, creating liability for unpaid service tax; interest on such retrospective tax is required. Penalty treatment is qualified by a proposed explanatory provision that would bar penalty where service tax plus interest is paid before a departmental notice. The retrospective levy takes effect only upon enactment of the finance bill.