CESTAT: Co-owners renting building exempt under SSI. Waiver granted, recoveries stayed.

The Appellate Tribunal CESTAT Ahmedabad ruled in a case concerning service tax liability on individuals co-owning and renting out a building. The Tribunal determined that if the rent cheques were received individually by the appellants, they could be considered as individual service providers under the SSI exemption Notification No. 6/2005-ST. As the aggregate value of services provided by each individual did not exceed the threshold limit, the Tribunal granted waiver of pre-deposit of service tax liability, interest, and penalties. The Tribunal stayed recoveries pending the appeal's disposal.

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Issues Involved:
Service tax liability on individuals as providers of service under the category of renting out of immovable property.

Analysis:
The judgment before the Appellate Tribunal CESTAT Ahmedabad involved the issue of service tax liability on individuals who were co-owners of a building and had rented out the premises. The appellants sought waiver of pre-deposit of service tax liability, interest, and penalties under Sections 77 & 78 of the Finance Act, 1994. The Revenue contended that since the property was jointly owned and rented out collectively, service tax liability should be charged individually. However, the appellants argued that they should be considered individually under the SSI exemption Notification No. 6/2005-ST, as the amount received did not exceed the threshold limit. The Tribunal analyzed the notifications and found that if the cheques for rent were received individually by the appellants, they could be considered as individual providers of the service, and their aggregate value did not exceed the threshold limit, making a prima facie case for waiver of pre-deposit.

The Tribunal considered the submissions made by both sides and interpreted the SSI exemption Notification No. 6/2005-ST dated 1.3.2005, as amended by Notification No. 8/2008-ST dated 1.3.2008. The notification granted exemption of service tax per year if the assessee had not crossed the threshold limit of rupees ten lakhs in the preceding financial year. In this case, the Tribunal found that if the individuals received cheques for rent individually, as indicated in the agreement, they could be considered as individual providers of the service. The Tribunal noted that the notification specified that the aggregate value of taxable services rendered should be considered for exemption, and since individually all the appellants did not exceed the threshold limit, they were eligible for the exemption. Consequently, the Tribunal allowed the applications for waiver of pre-deposit of amounts and stayed recoveries until the disposal of appeals.

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