ST on under construction commercial shop on lease agreement
I have a perpetual lease agreement dated Mar 2014 with a Company registered at Delhi for a retail shop in a building consisting of office & retail units at Kolkata, building is still under construction. As per company demand letter I had paid S.Tax to the company at the full rate as applicable from time to time on the full installment amount of premium. So far I have paid ST on application money + 5 installment of premium. Eg I paid first installment of premium RS 582,855 + ST RS 72,041 (12.36%) in Mar 2014. According to company, u/s 65(B), leasing / renting comes under declared service thus chargeable to full rate of ST, which I agree.
However my u/standing is as follows:-
(1) u/s 65(B) -renting, ST is applicable only to the ' lease rent' amount which as per our lease agreement is Rs 12/-per year for a period of 999 yrs aggregating to Rs 11,988/-t, which I am liable to pay.
(2) ST on Construction: u/s 66(E), for an u/construction immovable property, ST to be levied on value of construction service provided, alternately under composition scheme, considering rate of abatement of 75%, ST to be levied only on 25% of total value, which company is supposed to pay to the Govt.
Whereas in my case, as per company demand, I had paid ST to the Company on the full value of premium amount for each installment.
If there is merit in my points, kindly advise-
1) procedure I should follow to get refund of excess ST amount paid to the company .
2) How to find actual amount of ST Company has deposited with the Govt. Office against my 'unit' till date.
Many thanks & Best Regards/ Tapan
Asked 2 years ago in Service Tax from Kolkata, West Bengal
With respect to your quarry kindly find below details for your reference :
1. The Service shall be subject to service tax as per the Section 65(B). The amount of Service tax shall be Payable only on leasing value and interest portion in premium paid by you. So service tax shall be calculated on both of this amount. Any amount paid in excess of it can be claimed back by negotiation with company only if they have not further paid it to department. if they have paid to department than it will be really difficult to get back refund from it.
2. You can find details only from company from the challans paid by them. there is not be any other mechanism for it as on date.
It is very difficult to get the money out of the Governments kitty, since the Service tax Return is not filed by you or in your name. So technically you are not the rightful recipient of the amount if any.
The max you can do, is ask the Company to whom you have paid the Service Tax amount to provide you with the circular under which they have charged you Service Tax. And then you can settle with them the extra amount paid by you.
Feel Free to get back for any further clarifications.
CA Rohit R Sharma
CA, LLB - Gen, FAFP, BCOM