2013 (12) TMI 907 - AT - Service Tax

Tribunal Grants Waiver on Service Tax for Co-Owners Renting Property

MANJU CHAMPAKLAL BAFNA Versus COMMR. OF SERVICE TAX, AHMEDABAD

MANJU CHAMPAKLAL BAFNA Versus COMMR. OF SERVICE TAX, AHMEDABAD - 2013 (31) S.T.R. 511 (Tri. - Ahmd.) Issues:Service tax liability on individuals as providers of service under Renting out of Immovable Property.Analysis:The judgment pertains to five applications filed against a common order in appeal for waiver of pre-deposit of an amount of Rs. 1,85,621/- confirmed as service tax liability, interest, and penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The core issue revolves around the service tax liability on the individuals involved as providers of service under the category of Renting out of Immovable Property.The appellants, who are co-owners of a building rented out to HDFC Bank, argued that the amounts received by them fall within the threshold limit of SSI exemption as per Notification No. 6/2005-S.T., dated 1-3-2005, and its amendment. They contended that the Revenue incorrectly considered the amounts collectively received by all appellants and sought to charge service tax liability individually. On the contrary, the Departmental Representative argued that since the property is jointly owned and rented out, service of Renting out of an Immovable Property is applicable. The department asserted that the service tax liability was correctly assessed considering the amounts collectively received by individual appellants.Upon evaluating the submissions from both sides, the Tribunal found that the benefit of the SSI exemption Notification allows exemption of service tax per year if the assessee has not crossed the threshold limit in the preceding financial year. The notification specifies that the aggregate value of taxable services rendered should be considered for exemption. In this case, individually considering all appellants as service providers, their aggregate value did not exceed the threshold limit. Therefore, the Tribunal concluded that the appellants established a case for waiver of pre-deposit of amounts involved. Consequently, the applications for waiver of pre-deposit were allowed, and recoveries were stayed pending the disposal of appeals.In conclusion, the judgment provides a detailed analysis of the service tax liability issue concerning individuals as providers of service under Renting out of Immovable Property. It highlights the interpretation of the SSI exemption Notification and the Tribunal's decision to grant waiver of pre-deposit based on the aggregate value of taxable services rendered by the individual appellants.