Service tax applicability on Building insurance and ground rent

[Guest]

Dear Sir, My company is dealing in Real estate and Renting ( commercial) . We are charging following from customers:- 1. General Maintenance charges 2. Sinking Fund Charges 3. Building Insuarance charges 4. Rent 5. Ground Rent charges 6. Electricity / Water Charges 7. Parking Charges we are charging service tax on all items except ' Electricity / Water Charges' Some customer arguing that we should not charge service tax on 1. Building Insurance and Ground rent on the basis that company`s role is only like an agent to collect ground rent and pay it to DDA or other authority , similarly in the case of Insurance ... we should not charge on the ground that it will be charged twice. Your Views are solicited. Thanks Manoj

AI Summary

Real estate company questions service tax on building insurance and ground rent; considers agent role and valuation rules. A real estate and commercial renting company is seeking advice on whether service tax should be applied to building insurance and ground rent charges. The company currently charges service tax on several items but not on electricity and water charges. Some customers argue that service tax should not apply to building insurance and ground rent, as the company acts merely as an agent in these transactions. A respondent suggests that such reimbursements should be determined based on mutual agreements and specific circumstances, referencing valuation rules that allow deductions for pure agents.