Landlords bowled out by Tenants on Service Tax liability

the Appellate Tribunal was right in holding that the second reassessment proceedings were not validly initiated and thereby quashing the reassessment proceedings-the proceedings initiated by the AO for the second time under Section 147 is barred by limitation-even the proviso to Section 147 does not come into play on the facts of the case-AIT-2010-373-HC Even if the goods belong to same entry, manufacture does take place if new identifiable/marketable goods known in market emerge due to operation conducted-the process of ironing applied to the stiched brassieres prior to their packing was a process incidental to the completion of the brassieres as a manufactured product-process of purification and filtration being incidental or ancillary to the manufacture of a marketable product, the Respondent was entitled to Modvat credit on the inputs involved-AIT-2010-370-HC Larger Bench of CESTAT rules the Tribunal has ample power to condone the delay in filing the appeal including the one filed under section 35 E (4)-AIT-2010-372-CESTAT Corruption in IRS takes its toll-Deputy Commissioner of Income Tax Dhananjay Kumar arrested by CBI in Mumbai-Joint Commissioner of Customs & Excise Hemant Kothikar also arrested by CBI FM directs expediting of Cadre Restructuring in CBDT & CBEC Tariff Value for import of Brass Scrap is 3924-Customs Non-Tariff Notification No. 78 Chief Justice of Gauhati High Court Justice Ranjan Gogoi to be Chief Justice of Punjab & Haryana High Court Anti-dumping duty on imports of Acrylic Fibre originating in, or exported from Japan and Belarus-Customs Tariff Notification No.85 Prescribing SION for new product “Propylene” under Chemical & Allied Products Group-DGFT PN 7 Inclusion of Finished Leather in the Focus Product Scheme of FTP-DGFT PN 6 Exchange Rate for imported goods is Rs 47.25 per US Dollar and Rs 60.35 per EURO-Exchange Rate for export goods is Rs 46.30 per US Dollar and Rs 58.70 per EURO-Customs Non-Tariff Notification No. 77-Click on Exchange Rate for details Anti Dumping Duty under the Notification No.15/2007 is not applicable to Spandex Yarn (Elastomeric yarn)-Customs Circular No.30 Import of goods under Notification No.13/2010 for Commonwealth Games, 2010-Customs Circular No.31 Larger Bench of CESTAT rules charges towards pre-delivery inspection and after-sale-service by dealers from buyers of the cars to be included in the assessable value of cars for payment of excise duty-AIT-2010-366-CESTAT merely because there was non accounting of goods, penalty was technical and inference of clandestine removal was not called for-AIT-2010-365-HC ITAT rules provision for doubtful debts and provision for standard debts are to be taken into consideration for computation of book profit u/s. 115JB of the IT Act-AIT-2010-361-ITAT HC rules slitting of aluminum foils into customized width, mounting the same on the printing machine and thereafter printing the necessary text thereon is covered for 80IB benefit as it falls within the ambit of the term “produce”-AIT-2010-363-HC Definitive Anti-dumping duty imposed on imports of Coumarin, originating in, or exported from China-Customs Tariff Notification No. 82 Special Bench of ITAT Ruling-where a forward contract is entered into by the assessee to sell the foreign currency at an agreed price at a future date falling beyond the last date of accounting period, the loss is incurred to the assessee on account of evaluation of the contract on the last date of the accounting period i.e. before the date of maturity of the forward contract-AIT-2010-355-ITAT-SB

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Landlords bowled out by Tenants on Service Tax liability

AIT News Network

MUMBAI. The levy of Service Tax on commercial renting with effect from 1st June 2007 has added to the tax liability of Landlords who were hitherto enjoying lucrative rent on commercial properties owned by them. Though landlords are trying to pass on the burden of service tax to the tenants but many tenants have already refused to share the burden of service tax.

According to RS Sharma Advocate the landlords being a service provider are liable to pay service tax to the Government under the service tax laws. The landlords are also required to be registered with the Service Tax Office having jurisdiction over the location of the property. The demand of service tax will be issued by the service tax department to the landlord. Even if a tenant does not reimburse service tax to the landlord ; the landlord will have to pay service tax on his own. It can not be an excuse for not paying service tax that the tenant has not paid the service tax component to landlord. The only remedy available to landlords is to file a suit for recovery of service tax from the tenants.

In most of the cases; the existing rent agreements have no clause about the service tax and in the absence of such clause; it is not easy for landlords to recover service tax from the tenants. However, in cases where the rent agreement has a clause like “all future tax liability arising out of this agreement will be paid by the tenant”, the landlords may be successful in recovering service tax from the tenants.

The only solace to landlords is that the Property Tax amount paid can be deducted from the rental value for payment of service tax. Further, small landlords whose rent receipts are below Rs 8 Lakh from 1st June 2007 to 31st March 2008 will also be exempt from service tax vide Notification No. 6/2005-Service Tax as amended by Notification No.4/2007-Service Tax subject to the conditions of Notification. Even those landlords whose rental receipts are above Rs 8 lakh will be required to pay service tax only after crossing receipts of Rs 8 Lakh

The scope of “renting of immovable property” under the service tax includes renting, letting, leasing, licensing or other similar arrangements of immovable property for use in the course or furtherance of business or commerce but does not include-

(i) renting of immovable property by a religious body or to a religious body; or

(ii) renting of immovable property to an educational body, imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre;

The term“for use in the course or furtherance of business or commerce” includes use of immovable property as factories, office buildings, warehouses, theatres, exhibition halls and multiple-use buildings

"taxable service" means any service provided or to be provided to any person, by any other person in relation to renting of immovable property for use in the course or furtherance of business or commerce.

“immovable property” includes—

(i) building and part of a building, and the land appurtenant thereto;

(ii) land incidental to the use of such building or part of a building;

(iii) the common or shared areas and facilities relating thereto; and

(iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate,

but does not include-

(a) vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes;

(b) vacant land, whether or not having facilities clearly incidental to the use of such vacant land;

(d) building used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities.

An immovable property partly for use in the course or furtherance of business or commerce and partly for residential or

any other purposes shall be deemed to be immovable property for use in the course or furtherance of business or commerce.