Service tax
Notification No- 24/2007-ST, dated 22.5.2007
Exemption on taxable service of renting of
immovable property
G.S.R. (E).- In exercise of the powers conferred by
sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter
referred to as the Finance Act), the Central Government, on being satisfied that
it is necessary in the public interest so to do, hereby exempts the taxable
service of renting of immovable property, referred to in sub-clause (zzzz) of
clause (105) of section 65 of the Finance Act, from so much of the service tax
leviable thereon as is in excess of the service tax calculated on a value which
is equivalent to the gross amount charged for renting of such immovable property
less taxes on such property, namely property tax levied and collected by local
bodies:
Provided that any amount such as interest, penalty paid to the local authority
by the service provider on account of delayed payment of property tax or any
other reasons shall not be treated as property tax for the purposes of deduction
from the gross amount charged:
Provided further that wherever the period for which property tax paid is
different from the period for which service tax is paid, property tax
proportionate to the period for which service tax is paid shall be calculated
and the amount so calculated shall be excluded from the gross amount charged for
renting of the immovable property for the said period, for the purposes of levy
of service tax.
Example:
Property tax paid for April to September = Rs. 12,000/-
Rent received for April = Rs. 1,00,000/-
Service tax payable for April = Rs. 98,000/- (1,00,000–2,000) * applicable rate
of service tax
2. This notification shall come into force on the 1st day of June, 2007.
[F. No. B1/5/2007-TRU]
(G.G. Pai)
Under Secretary to the Government of India
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