Applicability of Service Tax.

[Niraj Kumar Gupta]

Dear Friends,

There is a shop in mall owned by 4 different persons jointly. The said shop has been given rent for Rs. 25,00,000/- p.a.. The agreement has been entered jointly by Co-owners stating that the each co-owner will receive the amount equivalent to their respective share in the rent directly from licensee. Thus every co-owner will receive Rent of Rs. 6,25,000/- collectively Rs. 25,00,000/-.

The query is that in this case whether service will be applicable or not either jointly or to every co-owner individually.

Thanks & Regards,

Niraj Kumar Gupta

[CA Alok Khare]

Dear Neeraj Ji

 

there si no liability of service tax on none of them, if ther total taxable services is below threshold limit of Rs. 10.00 lacs, hence in your case every co owner is seperate assessee and as per agreement every one is renting his share seperatley, whether in the same agreement or in four different agreement , no matter, hence is service tax is applicable.

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With Professional Regards
CA. ALOK KHARE
FCA DISA(ICA)
PARTNER
KUMAR KHARE & CO.
CHARTERED ACCOUNTANTS  

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www.kumarkhareca.com

[Rajat Mohan]

Dear Sir,

 

My reply is same as that of alok ji below. However few departmental officers issuing notice based upon a trade circular, which stipulated that if total rent of co-owners exceed Rs. 10 lacs then this exemption is not available.

 

Best regards

Rajat Mohan

B.Com(H), A.C.A., A.C.S., D.I.S.A.

Mobile: 9910044223

 

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[Niraj Kumar Gupta]

SSI exemption to be granted individually to individual co-owner of property.

Dear Professional Colleague,

Recently the Hon’ble CESTAT in the matter of PANKAJBHAI CHAMPAKLAL PAREKH Vs. COMMR. OF S.T. AHEMDABAD, 2013(31) S.T.R. 325 (Tri-Ahmd.), has held that in case a premises jointly owned by two or more person (i.e. two or more co-owners) is given on rent to a single person and cheques for rent are received individually by all the co-owner(s), then in such case all the co-owners be considered as provider of Renting of immovable property service individually. This being so, threshold limit for calculating SSI exemption will also applicable to individual co-owner rather than collectively to all the co-owner(s).

Opinion of the our respected professional colleague is confirmed by the CESTAT.

Hope the information will assist you in your Professional endeavors.

Thanks & regards,

Niraj Kumar Gupta

9971985594