Service Tax on Rent

[PONNADA B K RAVIKUMAR]

Whether we have to pay service tax on rent, as one delhi court decision came , not to charge service tax in 2009, in the current budget FM annouced with retrospective effect we have to charge service tax , how to proceed this issue, as we are having one branch in newdelh ,so the owner now he is claiming service tax from april'10 onwards, can you suggest this issue pls

[Rama Krishana]

Technically, the stay of the high court is conditional one and applicable to the parties of the writ petition. But, practically, you may take the shelter of the stay order of the High Court. It is not possible to predict the final decision of the High Court, but in any case, I would say that in the present situation, no demand would be confirmed beyond the normal period of limitation of one year from the date of receipt of the show cause notice, even if High Court decides the matter against the assessee.

[PONNADA B K RAVIKUMAR]

so whether we have to the service tax or not, if we have to pay then from which date, pls check and confirm sir

AI Summary

Service tax on rent: retrospective amendment creates exposure, with party specific stay and one year limitation from show cause notice. Whether service tax applies to rent after a retrospective budgetary amendment is contested; a High Court stay is conditional and binding only on petition parties, so third parties remain exposed. Reliance on the stay may be practical for those parties, but retrospective amendments can create exposure, and confirmed demands are typically limited by a one year limitation period from receipt of the show cause notice.