Service tax liability- exemption limit

[Guest]

A company is paying service tax under reverse charge method on Goods transport Agency and having RC for GTA services. Also  rent is receiving from a customer and the rent received is below 10 lakhs. Whether service tax is required to be paid on the above rent received. Exemption limit of 10 lakhs can be apllied to the rent received without paying service tax.

 

[YAGAY andSUN]

Service Recipients  can't avail the benefit of threshold limit while paying the service tax under reverse charge mechanism.  But the benefit of threshold limit will be available to them when they do fall under the category of Service Provider and fall under the category of small service providers.

Therefore, untill you reach to the threshold limit you need not to charge the tax on Renting of immovable property.  Further, at the time of charging Tax you can also deduct the amount of property tax paid by you on that particular property from the taxable amount of services provided by you.

 

AI Summary

Threshold exemption for renting of immovable property applies to small providers but not to recipients under reverse charge. The threshold exemption for renting of immovable property applies to persons acting as service providers who qualify as small providers and need not charge service tax until they exceed the threshold; service recipients paying tax under the reverse charge mechanism cannot claim the threshold benefit. When charging tax as a provider, property tax paid on the property may be deducted from the taxable amount of the renting service.