2025 (6) TMI 1172 - AT - Service Tax

Liability of appellant to pay service tax - appellant who had provided their premises on rent is liable to pay service tax on the rent received by them or not - HELD THAT - As per the impugned order the adjudicating authority admits that the appellant is a religious body and as per the statutory provisions such religious bodies are exempted from payment of service tax. Considering the ratio of the decisions relied upon by the appellant he is not liable to pay service tax on the rent received by them. The impugned order is set aside and the appeal is allowed.

Summary

The Appellate Tribunal (CESTAT Bangalore) addressed whether the appellant, a religious body renting out premises, was liable to pay service tax on rent received post-introduction of the 'renting of immovable property service' effective 01.06.2007. The adjudicating authority had confirmed service tax demand and penalties for the period 01.06.2007 to 31.03.2010.Key legal provisions considered included Section 65(105)(zzzz) defining taxable services as "Any services provided... in relation to rendering of immovable property for use in the course or furtherance of business or commerce," and Section 65(90a) which excludes "renting of immovable property by a religious body" from taxable services.The appellant's Memorandum of Association confirmed its status as a religious body, and reliance was placed on precedents including *Church of South India Trust Association vs. Commissioner of CGST & Central Excise* (2024) 18 Centax 538 (Tri.-Mad.) holding that service tax demand on religious bodies is unsustainable.The Revenue contended that the rented premises were used for commercial purposes, sustaining the tax demand. However, the Tribunal noted the statutory exemption for religious bodies and, applying the cited case law, held that the appellant is not liable to pay service tax on the rent received.The Tribunal set aside the impugned order and allowed the appeal, providing consequential relief in accordance with law.