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SERVICE TAX - TAXABILITY OF LEASE PREMIUM (PART-1)

Service Tax - By: - Dr. Sanjiv Agarwal - Dated:- 25-8-2015 Last Replied Date:- 11-9-2015 - Renting of immovable property is a taxable service as a declared service. The term Service has been defined in clause (44) of the new section 65B inserted by the Finance Act, 2012 as applicable w.e.f. 1.7.2012 and means - any activity for consideration carried out by a person for another and includes a declared service. As per clause (a) of section 66E of Finance Act, 1994, declared services including the .....

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pecifies the charge of service tax which is essentially that service tax shall be levied on all services provided or agreed to be provided in a taxable territory, other than services specified in the negative list. Thus, as per charging section 66B, Service Tax shall be applicable on all services except services under negative list or exempt services as per exemption notification. Clause (m) of section 66D contains an entry in negative list relating to services by way of renting of residential d .....

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on or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property. Clause (viii) above is the residual clause which covers all arrangements which may not be covered under first seven alternatives, i.e., right to use, sub-lease, space sharing etc. The meaning of term other similar arrangements may be construed as the arrangement of immovable property in which someone is allowed, permitted, granted access and also i .....

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ice as determined in term of provision of section 67 of the Finance Act, 1994. As per section 67 of the Finance Act, 1994 the gross amount charged in respect of provisioning of taxable service shall be chargeable to Service Tax. As per section 67(1)(i) of the Finance Act, 1994, if the entire consideration received in money then the gross amount charged shall be such consideration. Without 'consideration', an 'activity' cannot be said to be a 'service'. Consideration means .....

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ration. Any amount received against provisioning of the taxable service shall be the gross amount charged and shall be chargeable to Service Tax. But if any amount is received from the service receiver which is not in relation to provision of taxable service, then such amount shall not be chargeable to Service Tax. Valuation is only a measure of tax whereas incidence of tax is on taxable event, i.e., rendering of service. In Federation of Hotel and Restaurant Association of India v. Union of Ind .....

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d while considering the true nature of the tax. Delhi High Court in Intercontinental Consultants and Technocrats Pvt. Ltd. v. Union of India (2012) 12 TMI 150;, has held that what is to be taxed is the gross amount charged by the service provider for such service . The words such service are important for taxation. It is only the value of such service which can be taxed and nothing else. The value of service, to be taxed, can, therefore, never exceed the gross amount charged by the service provi .....

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