Retailers to challenge service tax

Some of the leading retail firms of the country are planning to challenge the government’s recent decision to charge service tax on rentals. According to the new Union Budget that was released last week, a service tax of 12% has been imposed on all commercial rentals. There has also been an increase on the cess on education and services from 2% to 3%, adding up to a total of 12.4%. Service tax on rentals is technically meant to be paid by owners of the properties, although many lease agreements have clauses that state that service tax will be paid by the lessee.