TaxTMI 
TaxTMI 
TaxTMI 
The CESTAT, Delhi in the matter of M/s. Mec Shot Blasting Equipment Ltd v Commissioner, CGST [2022 (7) TMI 923 - CESTAT NEW DELHI]has held thatthe service tax cannot be levied on the company for payment of rent to the director unless such premises are used for commercial purpose.
Facts:
M/s Mec Shot Blasting Equipment Ltd (“the Appellant”) hasregistered with the Service Tax Department and deposits service tax regularly. A demand of Rs. 70,140/- was raised by the Commissioner (“the Respondent”) under Reverse Charge Mechanism (“RCM”) for residential premises, taken on rent by the Appellant from the Director and have been used by the Appellant as residence for its directors.
Further, there was another demand for Rs. 29,209/- for non-payment of Service Tax, which was not paid due to over site, as there are several transactions and otherwise, they were regularly paying service tax. Thus, there is no element of suppression.
Issue:
- Whether the Appellant was liable to pay service tax under RCM of Rs. 70,140/- for residential premises, taken on rent by the Appellant from the Director and have been used by the Appellant as residence for its directors?
- Whether the Appellant is liable to pay service tax of Rs. 29,209/- on renting of immovable property service.
Held:
The CESTAT, Delhiin [M/s. Mec Shot Blasting Equipment Ltd v Commissioner, CGST [2022 (7) TMI 923 - CESTAT NEW DELHI]] has held as under:
- Observed that, no service tax is chargeable, unless the premises are taken and used for commercial purpose. Thus, service tax is not chargeable.
- Held that, for other demand the situation is wholly revenue neutral and accordingly, invocation of extended period of limitation is not available to the revenue in the facts and circumstances.
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