Service Tax on renting of Quarters

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  1. Service Tax on renting Quarters by CPSU to Outsiders - A CPSU rents out its quarters to ex-employees and outsiders. Is the CPSU required to pay service tax on the collected rent?
  2. Amit Sahni

    Amit Sahni Active Member

    Service Tax is not levied on Residential Property.

    Are these Residential Quarters or some other type of Quarters?
  3. sai tejesh(

    sai tejesh( Active Member

    If the quarters which you have said is residential quarters,then the income received from these units is exempted from service tax.
    As renting of residential quarters covered under negative list.
  4. Sumit Agarwal

    Sumit Agarwal Active Member

    Negative list contains residential property letted out for residential purpose. So you must please see that it is not being used for any other purpose otherwise service tax is payable.
  5. Thanks to Sahni, Sai Tejesh and Sumit. The quarters are of course residential but the Company (CPSU) has rented it out not just to its employees on roll for their accommodation but to few outsiders on commercial rent basis. Those outsiders have no connection with the business of the company. Accommodations have been rented out to them because the company has just enough of vacant quarters owing to exodus. The Company collects/recovers rent at commercial rate from retired employees also who surrender accommodation after 2/3 years of retirement/death/voluntary retirement etc. In fact, the company rents out those quarters for generating revenue. What will be the Tax liability? Please reply as quick as possible.
  6. sai tejesh(

    sai tejesh( Active Member

    The quarters which you have given is exclusively for residential purpose of your employees or outsiders..then income from these units is exempted from service tax...Else..
    If you have given these quarters than otherwise for residential purpose of your employees or outsiders,then income from these quarters is liable to service tax.

    You are liable to service tax only when total rental income received from the quarters given other than for residential purpose purpose exceeds RS.10,00,000/-.
    Last edited: May 19, 2015
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