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
30 Jan 2013 
1 Reply 
1536 Views Renting of hotel accommodation may be exempt where a unit's declared tariff is below the prescribed threshold, affecting service tax liability.
Lease receipts from a hotel property may be exempt under the exemption for renting of hotels and similar lodging places if the unit has a declared tariff below the prescribed threshold; alternative views treat such receipts as rent for commercial property not covered by the hotel exemption. The exemption requires that the property be meant for residential or lodging purposes and that the declared tariff of a unit is below the statutory threshold. Availability of a 60% abatement is a distinct issue applicable only if the service remains taxable. (AI Summary)
Lease receipts from a hotel property may be exempt under the exemption for renting of hotels and similar lodging places if the unit has a declared tariff below the prescribed threshold; alternative views treat such receipts as rent for commercial property not covered by the hotel exemption. The exemption requires that the property be meant for residential or lodging purposes and that the declared tariff of a unit is below the statutory threshold. Availability of a 60% abatement is a distinct issue applicable only if the service remains taxable. (AI Summary)