renting of co-owned property

[satbir singhwahi]

Godowns are co-owned by by four persons with definite share

1.m- 35% , a- 20% , p-20%, pj 25%. registered land deeds are executed in their favour individually.

2. Rent is received individually with their pan .

3. Depatrment has issued SCN to Co-ownership to deposit service tax.

Now individually two persons are registered and paying tax.But two have receipts less than 9 lacs so not registered.

Please guide whether co-ownership should pay or individually.

[YAGAY andSUN]

Dear Satbir Singh,

Please find attached herewith relevant judgment for your kind information.

Regards

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

 

2013 (10) TMI 297 - CESTAT AHMEDABAD

Sh. Dineshbhai M. Patel Versus C. ST -Service Tax, Ahmedabad

Renting of Immovable Property Services - Joint property / co-ownership - benefit of SSI exemption Notification No 6/2005-ST - whether each owner is eligible for value based exemption - Held that:- the aggregate value of the taxable services rendered should be considered for the purpose of exemption and in the present case if individually all the appellants be considered as provider of such service, their aggregate value does not exceed the threshold limit. - Following Pankajbhai Champaklal Parekh Vs. Commar. Of S.T. Ahmedabad [2012 (11) TMI 252 - CESTAT AHMEDABAD] - Stay granted.

No.- Appeal No. ST/11296/13-DB

Dated.- August 20, 2013

 

Mr. M.V. Ravindran and Mr. H.K. Thakur, JJ.

For the Appellant: Sh. Hardik Modh (Adv.)

For the Respondent: Sh. G.P. Thomas (AR.)

ORDER

Per : Mr. M.V. Ravindran;

This stay petition is filed for waiver of pre-deposit of an amount of ₹ 1,87,996/- as service tax liability, interest thereof and penalties under various sections.

2. Heard both sides and perused the records.

3. The issue involved in this case is regarding service tax liability on the appellant herein as a provider of service under the category of ‘Renting of immovable property services’.

4. On perusal of the records we find that the appellant is one of the owners of the premises which was rented out to M/s. UDG Ventures; the appellant herein was owner of a particular shop, while there are various other owners who are entered into common Leave and License Agreement with the said M/s. UDG Ventures. Revenues case is that all the persons herein should be considered as a association of persons and liable to discharge the service tax liability, while it is the case of the appellant herein that he being an individual, and having received payment separately for the property rented out by him is eligible for the benefit of the exemption Notification No. 6/2005-ST. We find that an identical issue had come before this bench in the case of Dineshchandera V. Patel Vs. Commr. Of Service Tax, Ahmedabad [2013 (31) S.T.R. 296 (Tri. Ahmd.) and Pankajbhai Champaklal Parekh Vs. Commar. Of S.T. Ahmedabad [2013 (31) S.T.R. 325 (Tri. Ahmd. ) wherein we have granted unconditional waiver of the amounts of the service tax liability confirmed, on the ground that every individual is liable to avail the benefit of Notification 6/2005-ST. In the facts and circumstance of this case in hand, we find that there is no difference in the facts which was there in those two cases, accordingly we hold that the appellant has made out a prima facie strong case for the waiver of the pre-deposit of the amounts involved. In view of the foregoing, application for waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of appeals.

(Dictated and pronounced in the Court)

[satbir singhwahi]

thks Sir

So in reply to scn we can say as individuals are paying service tax individually and tds also individually, so co-owners not liable to service tax.Also quote the case law as stated .

AI Summary

Renting of immovable property services: individual co owners can claim small service provider exemption when rents are received separately. The issue is whether co owners renting common property are jointly liable or may be treated as individual providers for claiming the Notification No. 6/2005 ST exemption. Where title and receipts are in each owner's name, tribunals have applied the rule that aggregate value is the measure for threshold analysis but individuals who receive rent separately can be regarded as individual providers for the small service provider exemption, affecting registration and pre deposit compliance.