Service tax on " Rent on Immovable Property"

[Pradeep Kaushik]

Respected Sir,

We have taken a fectory premises on Lease in Gurgaon (Haryana). Our landlord is Charging Service tax on Rent amount. Please suggest, that Service tax on Rent for Immovable Property, is eligible. Should we reimburse the Service tax to our landlord. Is it mandatory for our landlord to get his registration in this service also.

Kindly give reference of any circular/ Notification in support of your valuable reply.

Best Regards.

Pradeep Kaushik

AI Summary

Service tax on rent: tenants may face liability and can claim CENVAT if eligible; consider reverse charge.
Service tax on renting of immovable property is being imposed and litigated; landlords charging it should register and issue tax invoices. Tenants using rented factory premises may claim CENVAT credit if the premises are used in taxable manufacture or services, so paying the charged tax and claiming input credit is commercially prudent. Adopting a reverse charge arrangement is suggested to ensure clear payment records and simplify potential refunds if the levy is later invalidated. Commentary questions whether letting constitutes a taxable service, arguing rent is primarily compensation for capital and risk rather than a value-adding service by landlords.