Case Law Details
Gurjant Singh Beant Singh Vs Commissioner of Central Excise And Service Tax (CESTAT Chandigarh)
Service Tax Threshold Limit Calculation Excludes Exempt Consideration; No Assessment for Services in Absence of Renting in Hire Contracts
Introduction: The case of Gurjant Singh Beant Singh vs. Commissioner of Central Excise and Service Tax (CESTAT Chandigarh) revolves around critical aspects of service tax, including the calculation of the threshold limit and the classification of services. The appellants, who provided buses to the Punjab Road Transport Corporation (PRTC), faced challenges related to the applicability of service tax. This article provides an in-depth analysis of the case, the key arguments presented, and the final decision by CESTAT Chandigarh.
Background: The appellants, Gurjant Singh and others, entered into contracts with PRTC, providing one bus each. They were remunerated based on a per-kilometer basis and were responsible for expenses such as diesel, maintenance, and driver salaries. The Department contended that the appellants were providing “Rent-a-Cab Service” and had not paid the applicable service tax.
Threshold Limit Calculation: The first aspect addressed in the case was the calculation of the threshold limit. Each appellant’s turnover was examined, taking into account the exemption provided under Notification No. 06/2005 dated 01.03.2005. The notification exempted 60% of the gross receipt from service tax, as per Notification No. 01/2006 dated 01.03.2006. The Department had accepted this principle for other individuals who had leased their buses to PRTC. The appellants argued that their turnover fell below the threshold limit based on this calculation.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
