Case Law Details
M. Vijayabharathi Vs Commissioner of GST & Central Excise (CESTAT Chennai)
In a recent case, M. Vijayabharathi v. Commissioner of GST & Central Excise [Service Tax Appeal No. 42320 of 2014 dated June 14, 2023], the CESTAT (Customs, Excise and Service Tax Appellate Tribunal) in Chennai made a significant ruling. The tribunal overturned the order that imposed service tax on the entire rent received by co-owners collectively. Instead, it concluded that the income earned as rent by each co-owner fell below the threshold limit, making it exempt from service tax.
Facts:
Mr. M. Vijayabharathi (“the Appellant”) jointly with Smt. Akila entered into an agreement with tenants of Ananda Towers for providing services of renting of immovable property during the period of 2007-08 onwards.
Upon investigation the Commissioner of GST & Central Excise (“the Respondent”) found that the Appellant and Smt. Akila have not paid the service tax on the rental income received from the property. The Department issued a Show Cause Notice (“the SCN”) demanding service tax from both co-owners jointly. The Adjudicating Authority confirmed the demand along with the interest and penalty from both the co-owners.
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