Threshold limit under Service tax act is for assesse, not for aggregate value of taxable service

Case Study:- Property was rendered on rent by three Co-Owners, According to Assesse threshold limit under Service tax act i.e, Rs10,00,000/- should be for each individual assesse and not for aggregate value of taxable service.   

Smt. K D Chaudhary

Commissioner of Service tax, Ahmedabad

ORDER NOS. S/1833-1835/WZB/AHD/2012

 

ORDER

M.V. Ravindran, Judicial Member –

Learned counsel on behalf of the appellants would submit that all the above individuals are co-owner of a particular building and have rented out the premises to M/s. Indian Overseas Bank at a monthly rent of Rs.1,06,415/-, who issues different cheques to all the above three appellants as they are co-owners. It is his submission that the amount received by the individuals would be within the threshold limit of SSI exemption as granted by Notification No.6/2005-ST dated 01.03.2005 and amended vide Notification No. 08/2008-ST dated 01.3.2008. It is his submission that the Revenue has considered the amounts received by all of the applicants as collectively and seeking to charge the service tax liability individually on the persons.

Learned Departmental Representative on the other hand would submit that the property involved in this case is jointly owned by all the persons and the said property is being rented out and hence there is service of renting out of an immovable property. It his submission that for individual purposes, and for the purpose of benefit of individual co-owners, the appellants sought the payment individually. It is his submission that the department is correct in assessing the service tax liability after considering the amount collectively received by the individual appellant.

After considering the submissions made by both sides, we find that benefit of SSI exemption Notification No.6/2005-ST dated 01.3.2005 as amended vide Notification No.8/2008-ST dated 01.3.2008, 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 (Study cafe) 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.