2024 (8) TMI 850 - AT - Service Tax

Classification of service - renting of immovable property service or not - facility of allowing car parking to visitors of mall - whether the appellant is liable to pay service tax for the parking area of car or not? - HELD THAT - The land used for parking purposes is not chargeable to service tax under the category of renting of immovable property service . This Tribunal in the case of MAHESH SUNNY ENTERPRISES PVT. LTD. VERSUS COMMISSIONER, SERVICE TAX COMMISSIONERATE 2014 (2) TMI 1001 - DELHI HIGH COURT where it was held that ' Now, parking services - regardless of wherever it is carried on-stand excluded in entirety. Therefore, it is not open now for the revenue to argue that it falls within the expression airport service under Section 65(105)(zzm). Parliament would have manifested its intention to bring to tax a part of the activity, carried out in airport premises, if it wished, in more express and clearer terms.' Admittedly, in this case, the appellant has not recovered any parking charges from the tenants/owners of the shops or their employees. Thus, no Service Tax is payable by the appellant for car parking fees under the category of renting of immovable property service . Therefore, the demand raised against the appellant on car parking charges is set aside - no penalty is imposable on the appellant. The impugned order is set aside - appeal allowed.

Summary

Issues:
Appeal against demand of service tax and penalty for car parking fees under "renting of immovable property service."

Analysis:
The appellant, a shopping mall, leased out shops and paid service tax under renting of immovable property service and maintenance charges under management, maintenance, and repair service. The car parking area was non-exclusive and available on a first-come, first-serve basis with charges fixed by the appellant. The appellant contested the demand for service tax on car parking, arguing it is not chargeable under renting of immovable property service. The Tribunal examined the definition of renting of immovable property under Section 65(90a) and held that land used for parking purposes is not taxable under this category.

The Tribunal referred to precedents like Mahesh Sunny Enterprises P. Ltd. and Select Infrastructure Pvt. Ltd. where it was observed that parking charges are excluded from the scope of renting of immovable property service. The Tribunal emphasized that car parking charges collected from casual visitors do not fall under this category, and in the absence of charging parking fees from shop owners or employees, service tax is not applicable. The Tribunal also cited the case of Brookefields Estates Pvt. Ltd., where it was reiterated that land used for parking purposes is excluded from service tax liability under renting of immovable property service.

Based on the above analysis and legal precedents, the Tribunal concluded that the appellant is not liable to pay service tax for car parking fees under the category of renting of immovable property service. Consequently, the demand for service tax on car parking charges was set aside, and no penalty was imposed on the appellant. The impugned order was set aside, and the appeal was allowed with any consequential relief.