Indian Real Estate Forum - www.indianrealestateforum.com - View Single Post - Service tax on commercial rental property will stay

Smantha Sen · 13-04-07

The finance ministry is likely to stick to its decision to levy service tax on renting of immovable property for commercial purposes.Commercial rental of property will be treated as a service and a tax of about 12.36% will be levied on it. In the coming years, we may also expand the scope of service tax to property leased for residential purpose.”
The move is expected to hit corporates, banks, multinationals, malls, restaurants, BPOs, IT companies and multiplexes the most. At present most of these organizations, especially BPOs only lease property to carry out their functions.
Real estate agents too are feeling the heat of the proposed tax and have protested as they are of the view that it would only lead to higher rental prices.

The reason for protest from all quarters is that the real estate boom, along with the lack of commercial space has already hiked rental rates further. Service tax will be an additional burden.

13-04-07	#1
Smantha Sen New Member Join Date: Jan 2007 Posts: 32 Thanks: 0 Thanked 0 Times in 0 Posts	Service tax on commercial rental property will stay The finance ministry is likely to stick to its decision to levy service tax on renting of immovable property for commercial purposes.Commercial rental of property will be treated as a service and a tax of about 12.36% will be levied on it. In the coming years, we may also expand the scope of service tax to property leased for residential purpose.” The move is expected to hit corporates, banks, multinationals, malls, restaurants, BPOs, IT companies and multiplexes the most. At present most of these organizations, especially BPOs only lease property to carry out their functions. Real estate agents too are feeling the heat of the proposed tax and have protested as they are of the view that it would only lead to higher rental prices. The reason for protest from all quarters is that the real estate boom, along with the lack of commercial space has already hiked rental rates further. Service tax will be an additional burden.