📰 𝗖𝗘𝗦𝗧𝗔𝗧 𝗥𝘂𝗹𝗶𝗻𝗴: 𝗡𝗼 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗼𝗻 𝗥𝗲𝗻𝘁𝗮𝗹 𝗔𝗴𝗿𝗲𝗲𝗺𝗲𝗻𝘁𝘀 𝗳𝗼𝗿 𝗝𝗼𝗶𝗻𝘁𝗹𝘆 𝗢𝘄𝗻𝗲𝗱 𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗯𝘆 𝗜𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀 📢 The bench of Dr. Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) held,

"Post 01.07.2012, the firm was not functional, and the rental agreements are in the name of the individual partner, with regard to the property held by them jointly. So, there cannot be a case of service to oneself. Hence, they are not liable to service tax."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗮𝘀𝗲 𝗧𝗶𝘁𝗹𝗲: M/s Sidhi Vinayak Associates v. Commissioner of Central Excise 𝗖𝗮𝘀𝗲 𝗡𝘂𝗺𝗯𝗲𝗿: Service Tax Appeal No. 51322 Of 2016

𝗜𝘀𝘀𝘂𝗲: Whether service tax is applicable on rental agreements entered into by individual partners for property they jointly own, under the "Renting of Immovable Property Services" as defined in Section 65 of the Finance Act, 1994.

𝗣𝗿𝗼𝗰𝗲𝗲𝗱𝗶𝗻𝗴𝘀: An intelligence report suggested non-payment of service tax by the assessee firm for rental services. The firm, which had been non-functional since 2009-10, had entered into rental agreements through individual partners.

A show cause notice demanded ₹16,44,367 in service tax, which was confirmed by the adjudicating authority and upheld by the Commissioner (Appeals).

⚖️ 𝗝𝘂𝗱𝗴𝗲𝗺𝗲𝗻𝘁: The CESTAT ruled in favor of the assessee, stating that since the firm was non-functional post-2012 and rental agreements were entered into by individual partners for jointly owned property,

the concept of service tax did not apply as the partners were effectively not providing services to themselves. The tribunal allowed the appeal, dismissing the service tax demand.

📜 This ruling clarifies that service tax is not applicable on rental agreements when individual partners rent out jointly owned property, reinforcing that one cannot be taxed for providing services to oneself. #TaxLaw #CESTAT #ServiceTax #LegalUpdate