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2014 (9) TMI 457 - HC - Service TaxRenting of immovable property - contractual obligation - Service tax to be born by the tenant or landlord - Arbitrator has interpreted Clause 7.1 of the lease deed to mean that the Service Tax liability in respect of the renting of the premises would be that of the Petitioner (landlord) - Held that:- In a given case, a service provider may well decide to undertake the burden of Service Tax itself without passing it on to the service recipient. What the intention of the parties in that regard is can be determined only by examining the relevant clause in the agreement they execute. Even Section 64A of the Sale of Goods Act (SGA) is useful in understanding the importance of the contract governing the parties. It opens with the words “unless a different intention appears to the terms of the contract”. Therefore it is the contract, and not the nature of the levy, which will determine which party, the service provider or recipient, is liable to bear the burden of service tax. In the present case, the wording of Clause 7.1 of the lease reflects the intention of the parties that it is the Petitioner who would bear the incidence of all taxes. In light of the decision in Rashtriya Ispat Nigam Ltd. v. M/s. Dewan Chand Ram Saran [2012 (4) TMI 457 - Supreme Court of India], the view of the learned Arbitrator that in terms of Clause 7.1 of the lease deed, the Service Tax liability is that of the service provider, i.e. the Petitioner, is a plausible one. - Decided against the petitioner.
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