Service Tax on immovable property

[Ashok Chopra]

1.  Service tax on rent of retail show room is not paid since last two years.  now land lord is asking to pay arrear.  can i take benefit now in my other business of manufacturing.  name of the company and code number is same and all branches are registered in registration certificate.

[Mahir S]

Yes, service tax paid on rent of retail show room can be availed and utilized.

However, only condition to be satisfied here is that some direct/indirect activity of your other business of manufacturing, is also carried out from the said retail show room.

[YAGAY andSUN]

You would have to establish nexus with your manufacturing activities to avail the benefits of CENVAT credit.  Further, for arrears, you would have to pay interest @ 13% and @ 18% accordingly.

AI Summary

CENVAT credit: rent-paid for retail showroom usable if nexus with manufacturing activities; arrears liable to interest. Service tax paid on rent of a retail showroom may be availed and utilized as CENVAT credit provided some direct or indirect manufacturing activity is carried out from that showroom to establish nexus; arrears of unpaid service tax must be paid and will attract interest at the prescribed rates.