TaxTMI 
TaxTMI 
Dear Sir,
We are a Public Limited Company. We have let out one of our Bungalows to another Corporate entitiy as Guest house and charge rent along with other maintenance charges (building maintenance) and Cook salary. Does this attracts Service Tax.
Renting of Immoovable property as Bungalow
13 Nov 2012 
3 Replies 
1749 Views Asked by
Service tax on commercial renting: guest house rentals and associated maintenance and manpower charges are taxable services.
Service tax applies to letting of property used commercially as a guest house because the negative-list exclusion for renting applies only to residential dwellings used as residence; therefore rent receipts from letting to a corporate as a guest house are taxable. Maintenance charges billed as a lumpsum including materials and labour are taxable, whereas only the separately billed labour portion is taxable if materials are paid by the tenant. Supplying a cook is a taxable supply of manpower. Threshold limits affect liability and Cenvat credit eligibility is subject to the Cenvat Credit Rules. (AI Summary)
Service tax applies to letting of property used commercially as a guest house because the negative-list exclusion for renting applies only to residential dwellings used as residence; therefore rent receipts from letting to a corporate as a guest house are taxable. Maintenance charges billed as a lumpsum including materials and labour are taxable, whereas only the separately billed labour portion is taxable if materials are paid by the tenant. Supplying a cook is a taxable supply of manpower. Threshold limits affect liability and Cenvat credit eligibility is subject to the Cenvat Credit Rules. (AI Summary)