Dear Sir,
Incase of partly renting of immovable property the building is rented out on monthly rental charges on which service tax is charged and paid to the Govt.Authority. The electricity is billed only to the single meter holder (owner) and is then partly recovered as re-imbursement from the tenant. Also the water charges is also recovered partly as re-imbursement of expenses. Kindly advise whether these charges attracts service tax ? If yes how as these are not services provided and are the re-imbursement of actual expenses without any mark up ? Will it be correct to drag these re-imbursement under Business Support services by the authorities ?
Please support any case law on these liines.
Rishabh
Service Tax Applicability on Reimbursement of Electricity and Water Charges in Partially Rented Properties Clarified Under Business Support Services A query was raised regarding the applicability of service tax on the reimbursement of electricity and water charges in a partially rented property. The property owner charges service tax on the monthly rent but seeks clarification on whether service tax applies to reimbursements for electricity and water, which are billed to the owner and partially recovered from the tenant. The concern is whether these reimbursements, being actual expenses without markup, could be taxed under Business Support services. The response indicated that if these reimbursements are not listed in the negative list or Mega Notification, they would be taxable. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
