2018 (7) TMI 1444 - AT - Service Tax

Classification of Services - Construction of Complex Services or not? - Department noticed that the appellant was not paying service tax on certain amounts recovered by them from their customers towards Car Parking charges and demanded tax under the head Construction of Complex Services. Held that - Car Parking Charges are admittedly towards provision of open car parking place within the residential complex - the provision of parking place within the residential complex is very much included within the definition of residential complex and the same will be liable to payment of service tax under the said category - demand upheld - appeal dismissed - decided against appellant.

Summary

Issues:
- Liability of service tax on car parking charges under the category of 'Construction of Complex Services'
- Interpretation of relevant sections of the Finance Act, 1994
- Applicability of abatement under Notification No. 1/2006
- Inclusion of parking place within the definition of residential complex

Analysis:
The appeal involved a dispute regarding the liability of service tax on car parking charges under the category of 'Construction of Complex Services' for the period 2007-2008 to 2011-2012. The appellant, engaged in construction, argued that car parking charges were not liable for service tax under this category, as they were already paying service tax on covered car parking charges. The appellant contended that open car parking charges were excluded from the definition of 'preferential location or external or internal development of complex service' under Section 65(105)(zzzzu). Additionally, the appellant sought the benefit of abatement under Notification No. 1/2006 applicable to residential complexes.

The Revenue, however, supported the impugned order, asserting that parking place was included in the definition of residential complex under Section 65(91a), making it liable for service tax. After hearing both parties and examining the records, the Tribunal found that the dispute centered on the amounts recovered by the appellant from buyers for open car parking within the residential complex. Upon reviewing the definition of residential complex, the Tribunal concluded that the provision of parking place within such a complex fell within the definition of residential complex, thus making it subject to service tax under the relevant category. Consequently, the Tribunal upheld the impugned order and directed the adjudicating authority to recalculate the demand based on this determination.

In conclusion, the Tribunal rejected the appeal, emphasizing that the provision of parking place within a residential complex was indeed liable for service tax under the 'Construction of Complex Services' category. The decision was based on a detailed analysis of the relevant provisions of the Finance Act, 1994 and the definitions of residential complex, highlighting the inclusion of parking place within such a complex for service tax purposes.