Service Tax on Commercial Premises on Rent.

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    DINESH P PAI New Member

    My Friend has given his commercial premises of 1750 sq ft on rent to a public sector bank, for a rent of Rs.40,000/- per month. The Annual Property Tax paid on this premises is Rs.12,000/-

    Whether the premises owner is liable to charge Service Tax on the rent received by him from the PSB.
    If yes, what will be the rate of Service Tax to be collected from the PSB. It is also informed by the Bank in the Rent Agreement that, all the taxes, including service taxes is to be borne by the Premises owner. For the services enjoyed by the Bank, is it not the Bank is liable to pay Service Tax?

    As the Annual Gross Rent received on the premises is Rs.4.80 Lakhs only, is it coming under the purview of Service Tax? Please clarify.
  2. Neha Sharma

    Neha Sharma Active Member

    Dear Dinesh

    Service Tax is liable to be paid in case the amount received is more than 10 Lakhs

    As in this case, the amount received is less than 10 Lakhs - Service Tax would not be liable to be paid
  3. johnsmith1987

    johnsmith1987 New Member

    I want to know who has to pay service tax, bank or the landlord . I know this landlord has to submit service tax but whether from his own pocket or collect it from the bank and then submit to authority .
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