Letting out shops/premises for shops, canteens, banks, etc. is ...

Commercial activities like shops, canteens not directly related to agriculture are liable for service tax; exemption denied as turnover exceeded limit.

Case Laws     Service Tax

October 8, 2024

Letting out shops/premises for shops, canteens, banks, etc. is liable to service tax as it is not directly related to agriculture and agricultural produce. The appellant is liable to pay service tax for the period 1.10.2012 to 31.03.2014 as the activities undertaken were for furtherance of business or commerce, not covered under the Negative List of Section 66D. The exemption under Notification No. 33/2012-ST is not applicable as the aggregate value of taxable services rendered by the appellant from one or more premises exceeded Rs.10 lakhs in the preceding financial years, which is a mandatory condition. The Apex Court has held that exemption notifications must be construed strictly, and all conditions must be fulfilled to claim the benefit. The Commissioner's finding that the appellant's total receipts exceeded the threshold limit for exemption is upheld. The appeal is dismissed.

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