Service tax on rent of a hospital building

We have a 8000 sq feet hospital building sanctioned by municipal corporation nashik as maternity and nursing home we are in process of leasing it to a group of Doctors the rent will be approx 2.5 lacs per month the building as CO owned by 2 brothers and 3 sisters the rent will be  shared as follows 40 % each for both brothers & 20% distributed equally between three sisters my question is 
Is the rent from Hospital eligible for service tax 
Who should pay the tax owners or tenant
Is there any way out to avoid service tax
Asked 7 months ago in Service Tax from Nashik, Maharashtra
Dear Sir,

In  the present case service tax land owners will have to collect and deposit the service tax with the service tax authorities. You have to apply for service tax registration number.

If the value of service provided by the service provider is less than 10 lacs in a year then no service tax will be payable. I will check and let u know whether this limit will appliacle jointly to all of you or separately.


Further doctors will deduct TDS @10%.

Please let me know if you have any questions in the above.

Thanks and Regards
CA Abhishek Dugar
Caabhishekdugar@gmail.com
Abhishek Dugar
CA, Mumbai
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No, there is no such exemption.
Abhishek Dugar
CA, Mumbai
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Hello Sir,

Service Tax shall be applicable if the Total amount of Rent exceeds Rs. 10 Lacs throughout the year. 

In your case the amount exceeds the basic exemption limit. It is preferred if you try not to avoid service tax as it is not a burden on you and you can very well charge the same to your tenant and pay it off to the Govt. 

Trust this clarifies your query. 

Feel free to get back/ call back in case of further details. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
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Dear Sir,

There is no such exemption for Hospitals. 

Trust this clarifies your query. 

Feel free to get back/ call back in case of further details. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
706 Answers
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Dear Sir,

The rent will be considered in Totality and not as per the share of owner. In case you want to do it that way then you will have to split the property and then raise separate bills or you can make a sub letting agreement wherein the brothers rent the property to sisters and the sisters in turn rent it to the hospital. 

Either or is not advisable as the former is cumbersome and the latter is subject to litigation. 

Trust this clarifies your query. 

Feel free to get back/ call back in case of further details. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB - GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
706 Answers
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Ideally the rent is considered in totality. However, if brothers and sisters have their separate ownership in the building, then each one of you can enter into separate agreements with doctors.

Please let me know if you have any questions on the above.

Thanks and Regards
CA Abhishek Dugar
Caabhishekdugar@gmail.com
Abhishek Dugar
CA, Mumbai
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