The Central Excise and Service Tax Department had a few months back sent a letter to the UT Estate Office for clearing the pending dues to be recovered from the lessees on account of service tax.
As per the guidelines issued by the Centre, owners of the leasehold commercial properties auctioned by the UT Estate Office and those who have converted industrial sites into commercial, have to pay the service tax. The notification issued by the government states that all lessees of the commercial property auctioned since July 1, 2007, are bound to pay the service tax at the rate of 12.36 per cent per year on the lease money/ ground rent charged by the UT Estate Office.
On the leasehold properties auctioned in the city, the lease money is charged for a period of 99 years from the lessees. The service tax division of the Central Excise Department has already taken note of the failure of the UT Estate Office to recover the service tax.