Service tax applicability

Santos (Querist) 01 February 2012 This query is : Resolved

Dear ALL,

Can service tax is applicable on electricity charges.

I have given my space on rental for tower installation. Also i have paid the electricity connection and monthly i am charging as per the electricity reading. Can I charge service tax on that electricity charges.

Please advice.

Regards,

Santosh

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Raj Kumar Makkad (Expert) 01 February 2012
No. You cannot charge service tax on the consumption of electricity in the given case.

R.Ramachandran (Expert) 01 February 2012
Dear Mr. Santos,
It will depend upon how do you bill the party.
If your monthly rental is inclusive of the electricity charges, then the service tax will be calculable on the overall amount.
If you bill the client separately for rent of the space and separately raise a invoice for reimbursement of actual electricity charges, then in that case, in respect of electricity charges you need not charge service tax.

Raj Kumar Makkad (Expert) 01 February 2012
Generally actual consumption bill is charged from tenants so I replied accordingly.

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