CENVAT OF SERVICE TAX

[S.C. WADHWA]

An Individual has property in delhi which has been given on rent. As per agreement, rent is inclusive of all taxes present or  furture .Thus, the rent received by individual is inclusive of service tax. Such individual pays service tax out of such rental income. Now, query is whether such individual can avail cenvat of service tax paid on any service availed by him. Is it necessary that such service availed should be in relation to provision of output service or cenvat can be availed on any service whatsoever The income from rent is chargeable to tax under head  Income from House Property'

 

AI Summary

CENVAT Credit on Service Tax for Rental Income: Deduct Property Tax for Savings, Rule 2(l)(i) Considerations An individual renting out property in Delhi inquires about availing CENVAT credit on service tax paid from rental income, which includes service tax. The response clarifies that property tax paid on rented premises can be deducted from the taxable service amount, offering potential savings. Additionally, since July 1, 2012, the definition of input service under Rule 2(l)(i) allows CENVAT credit if the services received are used for providing output services. However, CENVAT credit is not available under Clauses A, B, BA, and C.