Impact of service tax on the public of india.

Renting of Immovable property used for furtherance of business & commerce is a taxable service w.e.f dtd 1.6.2007. All Shopping Malls, Go downs & Offices given on rent are covered within the ambit of service tax. The landlord who gets the rent from shopkeepers and other persons is required to pay Service Tax.

Who is exempted from taxation?

Educational Institutes, Residential premises, Vacant lands solely used for Agriculture etc.

The threshold exemption of Rs 4 lakhs is available for the Service provider and there is no abatement.

How people are avoiding this Tax?

The landlords are diving the rent between all the members of the family even though all are not owners of the same property. Is it correct that one can just artificially divide the Rental Income in order to escape from taxation? The Govt has no time to answer this question. If it will face deficit, Govt is powerful enough to impose more tax. The poor conscientious taxpayer bears the burden & the cunning & mischievous person always escapes.   This is tragedy of India.

Sant Tulsidas aptly said “Samarath  ko nahi dosh” means capable persons cannot be questioned.

This levy of Service Tax on “Renting of Immovable Property” was challenged by “Home Solutions Retail India” in Delhi High Court. The Delhi High Court gave its verdict in favour of Party. The Union Govt taking into account the above decision issued Clarification that this service is taxable. Now in the new provision of Service Tax w.e.f 1.7.2012 , it is a declared service.