2018 (2) TMI 720 - AT - Service Tax

SSI exemption - rent a cab service - abatement of 60% - whether for the benefit of exemption for small scale service provider in terms of N/N. 6/2005-ST, the aggregate value should be computed after allowing 60% of abatement or the total value so received by the service provider? - Held that - 60% of the consideration received is exempted from the whole of the service tax leviable theron. Therefore, for the purpose of calculation of aggregate value as per said explanation B 60% of the consideration received by the appellant for which exemption was admissible does not need to be taken into consideration. After excluding 60% consideration the aggregate value of clearance for the year 2007-08, 2008-09 and 2009-10 in the present case is within the permissible limit for the exemption under the said N/N. 6/2005-ST dated 01.03.2005 - appeal allowed.

Summary

Issues:
Interpretation of small scale exemption notification for rent a cab services.

Analysis:
The judgment by the Appellate Tribunal CESTAT, ALLAHABAD involved the interpretation of Notification No.6/2005-ST regarding the small scale exemption for rent a cab services. The key issue was whether the aggregate value for the exemption should be computed after allowing 60% abatement or based on the total value received by the service provider. The lower authorities considered the total value inclusive of the 60% abatement, while the appellants argued otherwise.

The appellant relied on a previous decision by the bench in the case of Shri Ashok Kumar Mishra v. CCE & ST, Allahabad, where it was observed that Explanation B to Notification No.6/2005-ST allows exclusion of consideration received for services exempt from the whole service tax. Considering Notifications No.9/2004 and No.1/2006-ST, which exempted 60% of the consideration from service tax, the bench concluded that for calculating the aggregate value, 60% of the consideration for which exemption was admissible should not be included. After excluding the 60% consideration, it was found that the aggregate value of clearance in the present case fell within the permissible limit for exemption under Notification No.6/2005-ST. Consequently, the impugned order was deemed unsustainable, and both appeals were allowed with consequential relief.

In conclusion, the Appellate Tribunal CESTAT, ALLAHABAD, set aside the impugned order and provided relief to the appellants based on the interpretation of the small scale exemption notification for rent a cab services as per the relevant legal provisions and precedents.