TaxTMI 
TaxTMI 
Our client is a partnership firm in ownership of a hotel at Mangalore. This hotel is leased to another individual on a monthly rent of Rs.2 Lakhs. The lessee is letting out rooms on daily rent and the declared tarrif is less than Rs.1000 per day. I would like to know whether my client would be liable for service tax on the rent collected since renting of Hotel is exempted vide Exemption notification no. 25/2012 ( Enrty Sl.No.18). What would the scenario be if the declared tarrif is Rs.1000 or more. Can my client avail abatement of 60% of the value of taxable services rendered by him?
renting of immovable property
Ramachandran and Ramachandran Associates Subramanian
Hotel Partnership Seeks Tax Exemption for Rooms Under Rs. 1000 Tariff; Clarification on Notification No. 25/2012, Entry 18 A partnership firm owns a hotel in Mangalore, leased to an individual for Rs. 2 lakhs monthly. The lessee rents rooms with a tariff below Rs. 1000 daily. The firm seeks clarification on service tax liability, referencing Exemption Notification No. 25/2012, Entry Sl. No. 18, which exempts renting hotels with tariffs below Rs. 1000. Sanjeev Bajaj responds that the situation may be seen as renting commercial property, not covered by the exemption, but he believes it fits within Entry No. 18's exemption criteria due to the tariff being below Rs. 1000. (AI Summary)