PAYMENT OF SERVICE TAX

[S.C. WADHWA]

I am being an individual have given property on rent to an business entity in the year 2006 @Rs.20 lacs per month and entered an agreement that the rent was inclusive of all taxes at present and in future also. Service tax levied on renting services w.e.from 1.7.2007 and since then I am paying service tax by treating rent of 20 lacs inclusive of service tax as the said entity denied to pay service tax on rental amount as agreed.

Now my query is that when service receiver is liable to pay tax under reverse charge irrespective of the status of service provider whether eligible for service tax payment or not w.e.from 1.7.2012.  Whether I should stop for paying service tax for the quarter ending 30.9.12 onwards. Please give your expert opion on the matter immediately.

 

 

AI Summary

Individual Queries Service Tax Liability Under Reverse Charge for Property Rental Agreement An individual rented out property to a business entity in 2006 with an agreement that the rent of Rs. 20 lacs per month would include all taxes. Service tax on renting services was introduced on July 1, 2007, and the individual has been paying this tax since, as the business entity refused to cover it. The individual inquires whether they should stop paying the service tax from the quarter ending September 30, 2012, since the reverse charge mechanism makes the service receiver liable for the tax. The response indicates that under reverse charge, the service provider only charges their share of applicable service tax.