Issue - 'Service tax on letting out of Immoveable property'

[C.P. SEKAR]

when service tax is charged by the bankers, insurance companies, telecomunication service provieders, such service tax is collected from the customers without their consent and added to their bills or debited to their account without the knowledge of the customer and the customer is paying without raising any question? But when it comes to 'Service tax on letting out of Immoveable property' why this debate? Here also the act of letting out of immoveable property is treated as Service and when it is treated as service the landlord is also entitled to recover the service tax from the tenant by raising bill? Is it correct?

[Surender Gupta]

Yes, you are absolutely right; these types of disputes arise where both the parties are on equal footing. However, since this service is new one, the service receiver may object initially, but later on would pay without any hassles in future.

[Guest]

What will happen if there is a clause in the "Lease Deed" that all taxes & duties on property shall be born by Owner.

AI Summary

Service tax on property leasing: landlord may recover tax from tenant by billing, subject to lease terms. Letting out of immovable property is treated as a service for service tax purposes, and landlords, as service providers, can seek to recover the service tax from tenants by invoicing them; initial objections by tenants may occur but contractual lease clauses allocating taxes and duties will govern whether the landlord may charge and recover that tax.