Exemption threshold for renting service excludes reverse-charge GTA receipts, so only renting income counted for eligibility.

For exemption under Notification No. 6/2005-ST, only receipts from the taxable renting of immovable property were relevant for testing the aggregate value threshold. The CESTAT held that receipts relating to goods transport agency services, where tax was payable under reverse charge, were specifically excluded by the notification and could not be clubbed with renting receipts for threshold computation. As the renting receipts for each relevant financial year were below the prescribed limit, the exemption was available and the service tax demand was unsustainable.

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Issues: Whether the appellant was entitled to exemption under Notification No. 6/2005-ST for renting of immovable property, and whether receipts relating to goods transport agency services liable under reverse charge were to be included while computing the aggregate value threshold.

Analysis: The receipts from renting of immovable property for each relevant financial year were below the prescribed threshold of four lakh rupees. The notification, while prescribing the aggregate value limit, specifically excluded amounts received towards goods transport agency services where tax liability was under reverse charge. Therefore, only the renting receipts were relevant for determining eligibility under the exemption notification, and the GTA receipts could not be clubbed for this purpose.

Conclusion: The appellant was entitled to the exemption, and the service tax demand was not sustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed.

Ratio Decidendi: For computing the threshold under the exemption notification, receipts from goods transport agency services payable under reverse charge are excluded, and only the taxable receipts covered by the relevant service are counted.

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