Queries on taxation and service tax liabilities, addressed by
Vivek Sharma & Manav Saneja of Ernst & Young
We have been informed that a “One Time Amnesty Scheme” has been introduced in the Union Budget 2013-14 for assessees who have not paid their tax dues from 1 October 2007 to 31 December 2012. Further, it has also been informed that we need to file a declaration with service tax authorities so that we can get immunity from interest/ penalty/any other proceedings. Please let us know in which format we need to file the declaration.
Union Budget 2013-14 vide Finance Bill 2013 has proposed a ‘One time Amnesty Scheme’ (the scheme) in service tax by granting immunity from interest, penalty and prosecution/any other proceedings to all assessees who have not paid their dues and/ or have filed service tax returns with incorrect liability from 1 October 2007 to 31 December 2012. Under the scheme, 50% of the tax dues have to be paid before 31 December 2013 and balance by 30 June 2014.
However, the scheme will come into force from the date of enactment of the Finance Act 2013 i.e. after the President's consent, which is expected shortly. As of now, no format of declaration has been specified by the central government.
The same would be notified by the central government in due course.
Service tax on leasing and renting
We have taken a land in Sikkim on lease from a landlord for 99 years, as the state laws of Sikkim do not permit any sale of land to non-domicile persons. We have paid the entire lease premium to the landlord on a one-time basis. We wish to understand whether this transaction amounts to renting of immovable property and hence leviable to service tax.
The central government vide Union Budget 2010-11 amended the definition of ‘Renting of Immovable Property’ to include vacant land, given on lease or licence for construction of building or temporary structure at a later stage to be used for furtherance of business or commerce.
In this case, you have taken the land on lease, presumably for setting up a