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April 2014

[2014] 41 taxmann.com 311 (Ahmedabad – CESTAT) – Dilip Parikh vs. CST, Ahmedabad

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Pre-deposit Waiver – Threshold Exemption is prima facie available to each Co-owner separately.

Facts:
The Appellants were co-owners of a building which was rented out to a person. The said person issued separate cheques to individual Appellant as they were co-owners of the property. The amount received by the individual Appellant was within the threshold exemption limit and therefore no Service tax was paid. The department contended that, for individual purposes and for the purpose of benefit of individual co-owners, the Appellants sought the payment individually, hence the Service tax liability should be considered after taking into account collective rent received by the Appellants.

Held:
The Tribunal after perusing the threshold Exemption Notification and agreements between the parties held that, amount of rent received by individual Appellant is specifically mentioned in the agreement so as to make it specific that individually they are renting out the property to a person. Hence, individually, each of the Appellants would be considered as provider of such service, whose aggregate value did not exceed the threshold limit. Complete waiver of pre-deposit was granted.

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