Change in Budget on 'Renting act' restrospectively - Interest and peanlty on rent not paid earlier, Service Tax

[chaganti srinivas]

Dear Sir, Since there is a change in the Budget on 'Renting act' restrospectively from 1st june'2007 making 'Rent itself is a taxable service' now, Do we need to pay Interest and penalty on the rent whichever is not paid earlier.

Posts / Replies

[SOHRABH JINDAL]

YES., according to clause- c of section 76 of the finance bill- 2010, interest and penalty shall be recovered.

[Vijay Chitte]

Interest is mendatory but, penalty can not be impoesed, if S. tax is paid before Show cause notice. And this will also proposed in this Budget, insert an explanation in sub-saction (3) of Section 73 to clarify that no penalty shall be imposed where service tax along with interest has been paid before issuance of notice by the department.

[RAJESH MANGAL]

I am agreed with the reply given by Mr Vijay. Further to add, tax will be levied retropectively w.e.f 01.06.07 only after the bill will be enacted.