2018 (6) TMI 1003 - AT - Service Tax

Renting of Immovable Property Service - reverse charge mechanism - N/N. 6./2005-ST dt.1.3.2006 - Held that - It can be seen that in each year the total receipt of service charges is less than ₹ 4 lakhs therefore the appellant is clearly eligible for exemption Notification No. 6/2005-ST. As regard the contention of the Revenue that the value of GTA service to be included in the aggregate value. It is clear that for calculating the aggregate value of threshold limit of ₹ 4 lakhs, the value of goods transport agency service for which the person liable of paying the service tax shall not be taken into account. In this position the only value of renting of immoveable property shall be taken into account for the purpose of exemption limit. Therefore appellant is clearly entitled for the exemption N/N. 6/05-ST. Demand not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether the appellant is liable to pay service tax on renting of immoveable property.

Analysis:
The appellant contended that they are engaged in providing services related to GTA service on reverse charge mechanism and renting part of their office building, with the total rent received below ?4 lakhs annually, making them eligible for exemption under Notification No. 6/2005-ST. The Revenue argued that the appellant, being a deemed service provider for GTA service, is not entitled to the exemption. The Tribunal noted that the demand was upheld for renting of immoveable property service for the period 2007-08 to 2011-12, with the gross values received each year being below ?4 lakhs. The Tribunal referenced the notification to determine the aggregate value, clarifying that only the value of renting of immoveable property should be considered for the exemption limit. Consequently, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal.

This judgment revolves around the issue of whether the appellant is liable to pay service tax on renting of immoveable property. The appellant argued for exemption under Notification No. 6/2005-ST due to their total rent received annually being below ?4 lakhs. The Revenue contended that the appellant, being a deemed service provider for GTA service, is not eligible for the exemption. The Tribunal analyzed the values received for renting of immoveable property for each year, confirming that they were below the threshold. The Tribunal referred to the notification to determine the aggregate value, emphasizing that only the value of renting of immoveable property should be considered for the exemption limit. Consequently, the Tribunal allowed the appeal, setting aside the demand for service tax.