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2020 (1) TMI 426 - AT - Service TaxRenting of Immovable Property Service - co-owners - benefit of N/N. 06/2005-S.T. dated 01.03.2005 - appellant is receiving rent with the co-owners and the appellant share is deposited in their account separately - Revenue is of the view that the premises rented out is treated as one and therefore, on the rent received, the appellant is liable to pay service tax under the category of Renting of Immovable Property Service - whether being a co-owner, the appellant is entitled for exemption under Notification No. 06/2005-S.T. dated 01.03.2005 or not? HELD THAT - The issue decided in the case of ANIL SAINI, KABAL SINGH, NEELAM SAINI, SURINDER KAUR, JASWINDER SINGH, PARMOD KUMAR CHAUDHARY, SUKHJEET JODHA VERSUS CCE, CHANDIGARH-I 2017 (1) TMI 101 - CESTAT CHANDIGARH where reliance placed in Tribunal in the case of CCE, Nasik Vs. Deoram Vishrambhai Patel 2015 (9) TMI 790 - CESTAT MUMBAI wherein this Tribunal has held that the ownership of the Property and providing of taxable renting of immovable Property by the four appellants in this case is in their individual capacity and, therefore, their tax liability should have been determined by considering their individual rental receipts and not collective one, benefit on notification was extended. As the issue has already decided by this Tribunal and the rent received by the appellant remains within the threshold limit of SSI exemption under N/N. 06/2005-ST dated 01.03.2005, therefore, the appellant is entitled for exemption under N/N. 06/2005-S.T. dated 01.03.2005. Hence, no service tax is payable by the appellant. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the appellant, as a co-owner of a property rented out jointly with others, is liable to pay service tax under the category of "Renting of Immovable Property Service"? 2. Whether the appellant is entitled to exemption under Notification No. 06/2005-S.T. dated 01.03.2005? Issue 1: Liability for Service Tax on Renting of Immovable Property Service The appellant, a co-owner of a property rented out jointly with others, was receiving rent deposited in their account separately. The Revenue contended that the rented premises should be treated as one, making the appellant liable to pay service tax on the rent received. A show cause notice was issued, leading to the impugned order against which the appellant appealed. The Tribunal examined whether, as a co-owner, the appellant was liable for service tax. Referring to a previous case, the Tribunal emphasized that jointly owned property rented out triggers service tax liability. However, the Tribunal found that the first appellate authority wrongly considered all co-owners as one entity for tax liability determination. The Tribunal noted that each co-owner received rent individually, and their tax liability should have been determined based on individual rental receipts. The Tribunal concluded that the appellant, as an individual co-owner, was not liable to pay service tax as the rent received remained below the exemption limit under Notification No. 06/2005-S.T. dated 01.03.2005. Therefore, the Tribunal set aside the impugned order, ruling that no service tax was payable by the appellant. Issue 2: Entitlement to Exemption under Notification No. 06/2005-S.T. The Tribunal analyzed whether the appellant was entitled to exemption under Notification No. 06/2005-S.T. dated 01.03.2005. It was observed that the rent received by the appellant fell within the threshold limit of the Small Scale Industry (SSI) exemption specified in the notification. Citing the Tribunal's previous decision and the appellant's compliance with tax payments exceeding the exemption limit in subsequent years, the Tribunal held that the appellant was entitled to the exemption under the notification. Consequently, the Tribunal allowed the appeal, setting aside the impugned order and granting consequential relief to the appellant. In conclusion, the Tribunal ruled in favor of the appellant, holding that as a co-owner of a jointly rented property, they were not liable to pay service tax as their individual rent receipts remained below the exemption limit specified in Notification No. 06/2005-S.T. dated 01.03.2005. The detailed analysis highlighted the importance of individual tax liability determination for co-owners and the application of relevant exemptions based on the rent received.
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