a clause in a lease agreement says rent inclusive of all taxes. is it inclusive of service tax also?



the tenant argues that the rent is inclusive of service tax also, and is refusing to pay service tax. does the wordings inclusive of all taxes include service tax also?

a clause in a lease agreement says rent inclusive of all taxes. is it inclusive of service tax also?
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3 Replies to “a clause in a lease agreement says rent inclusive of all taxes. is it inclusive of service tax also?”


  1. The Quran in Sura 23:5-6 says:

    5 [Most certainly true believers] . . . guard their private parts scrupulously, 6 except with regard to their wives and those who are legally in their possession, for in that case they shall not be blameworthy. (Sayyid Abul A’La Maududi, The Meaning of the Quran, vol. 3, p. 237)

    The key words are “those who are legally in their possession.” Maududi (d. 1979) is a highly respected commentator on the Quran, and he interprets the plain meaning of the clause, saying that sex with slave-girls is lawful.

    10. A husband has sex with his wife, as a plow goes into a field.

    The Quran in Sura (Chapter) 2:223 says:

    Your women are your fields, so go into your fields whichever way you like . . . . (MAS Abdel Haleem, The Qur’an, Oxford UP, 2004)

    9. Husbands are a degree above their wives.

    The Quran in Sura 2:228 says:

    . . . Wives have the same rights as the husbands have on them in accordance with the generally known principles. Of course, men are a degree above them in status . . . (Sayyid Abul A’La Maududi, The Meaning of the Qur’an, vol. 1, p. 165)

    8. A male gets a double share of the inheritance over that of a female.

    The Quran in Sura 4:11 says:

    The share of the male shall be twice that of a female . . . . (Maududi, vol. 1, p. 311)

    7. A woman’s testimony counts half of a man’s testimony.

    The Quran in Sura 2:282 says:

    And let two men from among you bear witness to all such documents [contracts of loans without interest]. But if two men be not available, there should be one man and two women to bear witness so that if one of the women forgets (anything), the other may remind her. (Maududi, vol. 1, p. 205).

    6. A wife may remarry her ex—husband if and only if she marries another man and then this second man divorces her.

    The Quran in Sura 2:230 says:

    And if the husband divorces his wife (for the third time), she shall not remain his lawful wife after this (absolute) divorce, unless she marries another husband and the second husband divorces her. [In that case] there is no harm if they [the first couple] remarry . . . . (Maududi, vol. 1, p. 165)

    5. Slave—girls are sexual property for their male owners.

    The Quran in Sura 4:24 says:

    And forbidden to you are wedded wives of other people except those who have fallen in your hands [as prisoners of war] . . . (Maududi, vol. 1, p. 319).

    4. A man may be polygamous with up to four wives.

    The Quran in Sura 4:3 says:

    And if you be apprehensive that you will not be able to do justice to the orphans, you may marry two or three or four women whom you choose. But if you apprehend that you might not be able to do justice to them, then marry only one wife, or marry those who have fallen in your possession. (Maududi, vol. 1, p. 305)

    3. A husband may simply get rid of one of his undesirable wives.

    The Quran in Sura 4:129 says:

    It is not within your power to be perfectly equitable in your treatment with all your wives, even if you wish to be so; therefore, [in order to satisfy the dictates of Divine Law] do not lean towards one wife so as to leave the other in a state of suspense. (Maududi, vol. 1, p. 381)

    2. Husbands may hit their wives even if the husbands merely fear highhandedness in their wives (quite apart from whether they actually are highhanded).

    The Quran in Sura 4:34 says:

    4:34 . . . If you fear highhandedness from your wives, remind them [of the teaching of God], then ignore them when you go to bed, then hit them. If they obey you, you have no right to act against them. God is most high and great. (Haleem, emphasis added)

    1. Mature men are allowed to marry prepubescent girls.

    The Quran in Sura 65:1, 4 says:

    65:1 O Prophet, when you [and the believers] divorce women, divorce them for their prescribed waiting—period and count the waiting—period accurately . . . 4 And if you are in doubt about those of your women who have despaired of menstruation, (you should know that) their waiting period is three months, and the same applies to those who have not menstruated as yet. As for pregnant women, their period ends when they have delivered their burden. (Maududi, vol. 5, pp. 599 and 617, emphasis added)

    Holy Quran, 13:2380:

    The Prophet Mohammed(PBUH) used to kiss the little girl ayesha and suck her tongue when he was fasting.


  2. In my opinion the intent of the agreement was to include taxes in relation to the property that were already being paid by the lessor irrespective of whether the property was leased or not as a part of the compensation for allowing the same to be used by the lessee. It is very clear that when the lease rent was agreed upon it was worked out in such a manner that it considered two aspects, one the return on capital investment and the other re-imbursement of taxes and charges paid on the property.

    Thus it meant that the lessor intended to include taxes payable by him in respect of the said property like municipal, water, etc which the lessee was to enjoy. These taxes and charges were directly payable for the use of the property.

    Service Tax is a separate charge recoverable from the user of the service and paid to the Service Tax authorities. By law it has to be recovered from the user of the service by the provider. It has no relation to the property or any attributes thereof. It is directly proportional to the amount of money that is being paid for the service. Hence Service Tax is an implied tax and payable by the user of the services. Going by the logic of the lessee it would meant that if the agreement was silent then the lessee would not have to pay service tax at all. Thus the stand is incorrect. The intent of the wordings is more important rather than making presumptions based on the wordings of the Agreement.

    Going a step further The Delhi High Court has in a judgement earlier this year decided that NO SERVICE TAX is chargeable or payable on Lease Rentals. Since this is a view of the Delhi High Court it cannot be construed to be a law. It can at least be helpful in litigation. Since the decision of the Delhi High Court has been challenged in the Supreme Court by the ST authorities it would advisable for you to either collect the service tax and keep the same in an escrow account till the Supreme Court decides or take an affidavit from the lessee that he has requested you not to charge ST based on the Delhi HC judgement and he shall be liable in case the SC rules against the tenants.

    I trust this resolves your issue.





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