Registration of service tax - exemption limit

[Guest]

Renting of immovable property by Co-owners There is a single property let out for commercial purpose. Out of 4 Co-owners 2 are getting annual Rent Rs. 9 Lacs and other 2 are getting annual rent of Rs. 6 Lacs. Now does all the 4 co-owners need to get registered and pay service tax or only those crossing the threshold limit need to get registered and pay service tax. Regards

[Guest]

The threshold limit of applicability should be calculated on 'service provider' wise and not on property wise. Hence, in such case, two co-owners whose annual service income exceeds the limit should register, raise separate bill charging service on their portion of rent and pay it to the Govt. Other co-owners need not register, charge and pay service tax if their overall service income (including any other services rendered by them) does not cross the threshold limit. I am of the view that any deduction on service tax liability such as property tax and CENVAT on input services should also be claimed proportionately.

AI Summary

Service provider threshold determines registration for service tax; co-owners with excess receipts must register and remit tax. Service tax registration and liability for rent from jointly owned property is determined individually for each co-owner as a service provider by reference to that co-owner's aggregate taxable service receipts; co-owners whose receipts exceed the threshold must register, bill separately and remit tax, while others need not. Deductions and CENVAT credits should be apportioned proportionately among co-owners to reflect each share of the taxable service and tax liability.