2026-VIL-191-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax – Renting of immovable property – Tax liability – Appellants have rented out their properties for commercial purposes to various lessees as per lease agreements – Appellants have paid service tax under category of Renting of Immovable Property Service in their individual capacities as per their share in properties whenever the threshold limit for exemption had exceeded – Department issued show cause notice alleging that Appellants being an association of persons should discharge service tax liability jointly – Adjudicating authority confirmed demand proposed in show cause notice – Whether Appellants are liable to pay service tax individually after availing slab exemption or are collectively liable to pay service tax after pooling the entire consideration received as rent – HELD – Facts demonstrate that rent was paid separately to each co-owner with ownership shares being distinct and identifiable and lease payments having accrued directly to each co-owner rather than to any collective entity or association. There is no evidence to suggest joint management of property by co-owners. Appellants are entitled to be assessed separately for Service Tax in respect of their respective shares of rental income from property. Appellants as co-owners cannot be regarded as an association of persons for purpose of joint assessment of their total rental income under Service Tax. Each Appellant is entitled to individual assessment and may avail applicable slab exemption on an individual basis. Impugned orders are set aside – Appeals allowed
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