Renting of Immovable Property

Immovable property consists of a piece of land or building along with the things attached to the land. Immovable property is sometimes referred to real estate according to the common law. The person in acquisition of this property can avail the benefits to arise out of that land and use it as per their wishes.

Renting of an immovable property is taxable. As per section 65 (105) of Finance Act, 1994, services provided or to be provided in relation to renting immovable property for use in business or commerce is a taxable service. The Supreme Court, in the case of ‘Doypack Systems [1988 (36) ELT 201 (S.C.)], has held that the expression ‘in relation to’ is a very broad expression. Moreover even the Section 67 (ii) of the Finance Act, 1994 relating to valuation considers money value of any consideration (where any service is provided for any consideration) as part of gross value of taxable service. Further maintenance services are also separately covered under the service tax net. (Source: Business Standard)