Ques. We have taken a Villa With Garden on rent with as installed facilities like light, fan, AC, furniture, service water, housekeeping staff etc for 2 days. What is the rate of service tax on the above activity
Answer Renting of immovable property is specified as a declared service under clause the of section 66 E. The services of renting of immovable property including the service of short term accommodation service provided by hotels, inn, guesthouse, club or campsite etc. The service availed by you would fall under this taxable service as on date In the case where the declared tariff per unit of accommodation is Rs 1000 or above per day, service tax is payable. However as per entry number 6 of Notification No.26/2012-ST dated 20.06.2012, abatement is permitted to the extent of 40 per cent of the gross amount charged and the service tax is payable on 60 per cent of the gross amount charged from the customer.Hence in your case service tax is payable only on 60 per cent of the gross amount paid by you. Current rate of service tax is 14%. Hence you have to pay service tax at the rate of 14% on 60 per cent of the gross amount paid by you. This comes to 8.4% of the gross amount paid by you to the owner of the Villa.
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