Please Help: service tax on rent from immovable property let out to educational body

Posted Date : 05-Jul-2011 , 04:49:47 pm | Posted By rajat bhatia

one of my client is an educational institute. now for its corporate office, it has taken a building on rent. now , is owner liable to charge service tax in rent bill as he falls in service tax limit. but explanation 2 to sec 65(105)(zzzz) says as follows :-
“Renting of immovable property” 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.
does this explanation apply?? is service tax applicable or not

Category : Service Tax | Answers : 10 | Comments : 3 | Hits : 1343

Answers

Answer By: Vaneet Gupta

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CA VIPIN GARG

06-Jul-2011 , 09:11:04 am

Dear Bhatia Ji, I think service tax is applicable in the above mentioned case because exclusion covers only those cases where the purpose of the educational institute is just to impart knowledge and not to earn something like schools, govt. educational centres etc. The exemption is not apply in the above case because as from the wording it looks that educational institution is of private type and basically running to earn income. Hope you will find your answer and satisfied.