2016 (11) TMI 55 - AT - Service Tax

Small service provider - Eligibility for exemption under N/N.6/2005-ST - Goods Transport Agency service - Renting of Immovable Property Services - threshold limit - Held that - The clause of Notification No. 6/2005-ST as amended would be applicable in as much as, the said notification exempt the Service Tax liability on the small scale service providers, if the value of clearance is up to ₹ 10,00,000/-. It is the case of the assessee that during the relevant period, they received amount raised, it was the first year of renting out of the premises. We find that the notification in Clause 3 and explanation to clause 3 clearly indicates that aggregate value would mean some total gross value of receipt during the financial year, as prescribed under Section 67 of the Finance Act, 1994 charged by the service provider towards taxable services. The appellant had received only an amount of ₹ 10,22,656/- bifurcation of which for the period 01.06.2007 to 31.03.2008 is ₹ 6,39,160/- and for the period 01.04.2008 to 30.09.2008 is ₹ 3,83,496/-. It can be seen from the above factual matrix that the appellant have not received any excess of amount of ₹ 10,00,000/- in earlier years and accordingly entitled for benefit of Notification No. 6/2005-ST - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Applicability of Notification No. 6/2005-ST for exemption up to a certain limit.
2. Interpretation of Service Tax liability for renting out premises in a shopping complex.
3. Calculation of aggregate value for determining eligibility for exemption under Notification No. 6/2005-ST.

Analysis:
1. The appellant, a government undertaking registered under Service Tax as a Goods Transport Agency, leased out premises in their shopping complex without paying Service Tax under the category of Renting of Immovable Property Services. The authorities demanded the tax with interest and penalties. The appellant claimed the benefit of Notification No. 6/2005-ST for exemption up to ?10,00,000. The Tribunal found that the appellant received ?10,22,656 during the relevant period, falling within the exemption limit. The notification exempts small-scale service providers if the value of clearance is up to ?10,00,000. The appellant's total amount received did not exceed this limit, making them eligible for the exemption.

2. The Departmental Representative argued that as a Goods Transport Agency service provider, the appellant crossed the tax liability threshold. However, the Tribunal disagreed, stating that the authorities erred in concluding the Service Tax liability for the entire rent amount under Renting of Immovable Property Services. The Tribunal clarified that the appellant's total receipts fell within the exemption limit specified in Notification No. 6/2005-ST. The appellant's first-year renting out of premises and the specific amounts received during the relevant periods were crucial in determining their eligibility for the exemption.

3. The Tribunal examined the aggregate value concept under the notification, emphasizing that the appellant's total receipts did not exceed ?10,00,000 during the relevant period. The breakdown of amounts received for different periods further supported the appellant's claim for exemption. By analyzing the factual matrix and the provisions of the notification, the Tribunal concluded that the impugned order demanding Service Tax, interest, and penalties was unsustainable. Consequently, the Tribunal set aside the order and allowed the appeal, granting the appellant the benefit of the exemption under Notification No. 6/2005-ST.

This detailed analysis highlights the Tribunal's decision regarding the applicability of the exemption notification, the interpretation of Service Tax liability for renting out premises, and the calculation of aggregate value for determining eligibility for the exemption.