2023 (6) TMI 846 - AT - Service Tax

Co-owners exempt from service tax on rental income below threshold limit. Precedents cited, appeal allowed.

M. Vijayabharathi Versus Commissioner of GST & Central Excise, Tiruchirapalli

The Tribunal held that the appellant, jointly owning a commercial complex, was not liable for service tax on rental income as the individual income of ... Levy of Service Tax - Renting of Immovable Property Service - rental income received by the appellant from the property - HELD THAT:- In the case of the co-owner Smt. Akila, the Tribunal has set aside the demand observing that income received as rent separately by each co-owner is much below the threshold limit to subject to levy of service tax. Thus, the income falls within the threshold limit for payment of service tax. Vide A. AKILA VERSUS COMMISSIONER OF CENTRAL EXCISE, TRICHY COMMISSIONERATE TRICHY [2018 (10) TMI 559 - CESTAT CHENNAI] the Tribunal has relied upon the decision of ANIL SAINI, KABAL SINGH, NEELAM SAINI, SURINDER KAUR, JASWINDER SINGH, PARMOD KUMAR CHAUDHARY, SUKHJEET JODHA VERSUS CCE, CHANDIGARH-I [2017 (1) TMI 101 - CESTAT CHANDIGARH] where it was held that The service Tax Registration of individual assessees for collection of service tax is PAN based, hence, collection of service tax from one of the co-owners, against his individual Registration for the total rent received by all co-owners separately, is neither supported by law nor by laid down procedure. The demand do not sustain - appeal allowed. Based on intelligence, the appellant was investigated for providing services under 'Renting of Immovable Property Service' from 2007-08 and alleged non-payment of service tax. Agreements for the commercial complex were jointly executed by the appellant and a co-owner; the Department treated property tax assessment and rental income as jointly attributable and issued show cause notices, demanding service tax, interest and penalty. The original authority confirmed the demand and Commissioner (Appeals) upheld it. Tribunal record shows a prior Final Order (No.42538/2018 dated 01.10.2018) in respect of the co-owner set aside a similar demand, observing that 'income received as rent separately by each co-owner is much below the threshold limit to subject to levy of service tax' and that the 'income falls within the threshold limit for payment of service tax.' The Tribunal relied on Anil Saini v. CCE (2017 (51) STR (Tri.-Chan.)) and S.V. Janardhanam v. CGST & CE Salem (Final Order No.42474/2018). Following those decisions, the Tribunal held that the 'demand cannot sustain' and set aside the impugned order, allowing the appeal with consequential relief.