2015 (1) TMI 345 - AT - Service Tax

Waiver of pre deposit - Renting out of immovable property - SSI Exemption - Held that - Benefit of SSI Exemption Notification No. 6/2005-S.T., dated 1-3-2005 as amended vide Notification No. 8/2008-S.T., dated 1-3-2008, grants the benefit of exemption of Service Tax per year, provided that the assessee has not crossed the threshold limit of rupees ten lakhs in the preceding financial year. On perusal of the said notification, we find that the said notification talks about the aggregate value of the taxable services rendered, should be considered for the purpose of exemption and in this case if individually all the appellants be considered as provider of such service, their aggregate value does not exceed the threshold limit. Prima facie, we find that the appellants have made out a case for waiver of pre-deposit of amounts involved. - Stay granted.

Summary

Issues:
Service Tax liability on individuals renting out immovable property.

Analysis:
The case involved a Stay Petition seeking waiver of pre-deposit of Service Tax, interest, and penalty amounting to &8377; 2,28,077. The individuals in question were co-owners of a building rented out to a company. The main contention was whether the Service Tax liability should be assessed collectively on the individuals or individually based on the amounts received. The appellants argued that the amounts received were within the threshold limit for SSI exemption as per relevant notifications.

The Additional Commissioner argued that since the property was jointly owned and rented out collectively, the Service Tax liability should be assessed based on the total amount received by the individuals. The department contended that considering the amounts collectively for taxation was the correct approach.

Upon review, the Tribunal considered the SSI Exemption Notification No. 6/2005-S.T., dated 1-3-2005, as amended by Notification No. 8/2008-S.T., dated 1-3-2008. The exemption allowed if the aggregate value of taxable services rendered did not exceed the threshold limit of rupees ten lakhs in the preceding financial year. The Tribunal found that individually considering the appellants as providers of the service, their aggregate value did not surpass the threshold limit. Consequently, the Tribunal concluded that the appellants had made a case for the waiver of pre-deposit of the amounts involved.

Ultimately, the Tribunal allowed the applications for the waiver of pre-deposit amounts and stayed the recoveries until the disposal of the appeals. The decision was made after considering the submissions from both sides and interpreting the relevant exemption notifications to determine the Service Tax liability of the individuals renting out the immovable property.