Sub letting property - whether attracts service tax/

[LAKKUR SAI KRISHNA KUMAR]

Hi friends! New year Greetings

I have a query. Please advise me ,

The details are here below:

A Ltd has office space hired by them is being shared by one of its subsidiary company.A Ltd pays rent & other charges & Service Tax  to the  third party.

 

At end of the month A ltd  is raising an invoice on the said subsidiary for the reimbursement of proportionate expenses like rent, Electricity etc.., and charging service tax.

 Will the sub letting attracts service tax? please give your advise with references to the law/ notifications etc.

Grateful for your advise at the earliest

 

Kindly advise.

sai krishna kumar

[CA Ganesh Prabhu Balakumar]

Sir

a) Sub letting is also one again renting of Immovable property.  

b) Hope in the case you have mentioned by you, A Ltd is liable to Service Tax as it recovers the same as a "Reimbursement" from Subsidiary company and the third party is liable to services tax as renting of Immovable Property.

c) Generally, all rental agreements protects the tenet from sub letting. If sub letting is allowed as per the Rental agreement then the money received from letting  property on rent takes the characteristics of Renting of Immovable Property.

Regards

Ganesh Prabhu    

--
Ganesh Prabhu B l Partner l C.Ramasamy & B.Srinivasna, Chartered Accountants l M +91 98404 71139 l D 044 24721056l

"The success of the practitioner is that he should provide quality, at the price (where the value derived is higher than the fees), with grace and affection (with a smile) and there should be an element of service in the practice."

[Sai]

sir. Thanks for the advise. Grateful to you. regards. Sai

CA Ganesh Prabhu Balakumar <ganeshp...@gmail.com> wrote:

>Sir
>
>a) Sub letting is also one again renting of Immovable property.
>
>b) Hope in the case you have mentioned by you, A Ltd is liable to Service

>Tax as it recovers the same as a *"Reimbursement"* from Subsidiary company

>and the third party is liable to services tax as renting of Immovable
>Property.
>
>c) Generally, all rental agreements protects the tenet from sub letting. If
>sub letting is allowed as per the Rental agreement then the money received
>from letting property on rent takes the characteristics of Renting of
>Immovable Property.
>
>Regards
>Ganesh Prabhu
>
>On Thu, Jan 10, 2013 at 12:38 PM, LAKKUR SAI KRISHNA KUMAR <
>lakk...@gmail.com> wrote:
>
>>
>> Hi friends! New year Greetings
>>
>>
>> I have a query. Please advise me ,
>>
>> The details are here below:
>>
>>
>>
>> A Ltd has office space hired by them is being shared by one of its
>> subsidiary company.A Ltd pays rent & other charges & Service Tax to the

>> third party.**
>>
>> ** **

>>
>> At end of the month A ltd is raising an invoice on the said subsidiary
>> for the reimbursement of proportionate expenses like rent, Electricity

>> etc.., and *charging service tax*.****
>>
>> ** Will the sub letting attracts service tax? please give your advise

>> with references to the law/ notifications etc.
>>
>>
>> Grateful for your advise at the earliest
>>

>> ** **