Service tax applicability on letting out business, Service Tax

[Sarwan Agarwal]

Dear Sir, My client has taken a residential house on rent. He is using the house for letting out to his clients on monthly or weekly basis. What is the liability of Service Tax in this case and who is liable for to pay the owner of the house or my client. Regds

Posts / Replies

[Surender Gupta]

In case sub-letting is done for non residential activities, it is taxable. Further, in such case both the parties are liable to pay service tax.

[sarwan Agarwal]

Dear Mr. Gupta In ur reply u r of the opinion that both the party will be liable to service Tax. But as per clause (d) explanation 1 to Section 65 (105)(zzzz), property used solely for residence and for hotel, boarding house etc are not covered. Can u please clarify a little more. Best Regards

[Surender Gupta]

From the query, it appears that residential property is letout for non-residential purposes. Indeed, if the same is let out for residential purpose, no ST is payable.