Co-owners not jointly liable for Service Tax under Notification No. 06/2005-ST. -ownership

The Tribunal ruled in favor of the appellants, stating that co-owners cannot be collectively liable for Service Tax. The Tribunal considered individual rental receipts and the benefit of Notification No. 06/2005-ST. The demand of Service Tax was deemed unsustainable, and the impugned orders were set aside, allowing the appeals with consequential relief.

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Issues:
Appeal against demand of Service Tax under Renting of Immovable Property Services.

Analysis:
The appellants collectively own a property and received rent from a tenant. The Revenue claimed Service Tax as the total rent exceeded the threshold limit specified in Notification No. 06/2005-ST. The appellants argued that each co-owner received rent individually below the exemption limit. The Tribunal referred to a similar case and held that co-owners cannot be jointly liable for Service Tax. The Tribunal noted that for subsequent years, the appellants had paid Service Tax exceeding the exemption limit. The Tribunal found the demand unsustainable and set aside the impugned orders, granting relief to the appellants.

Conclusion:
The Tribunal ruled in favor of the appellants, stating that co-owners cannot be collectively liable for Service Tax. The Tribunal considered individual rental receipts and the benefit of Notification No. 06/2005-ST. The demand of Service Tax was deemed unsustainable, and the impugned orders were set aside, allowing the appeals with consequential relief.

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