Confirm whether serive tax is applicable on rent paid for parking space to lessor.
Lessee is a private company providing parking space to its employees.
Yes, it is certainly subject to service tax.
Can you please confirm with reference to particular section/notification. so that i can go through.
Dear Siddharth, post July'2012, Section 65B(44) defines "service"---any activity carried out by one person to another for consideration.
And further, clause no. 24 of Mega Exemption Notification(I.e. N/N 25/2012-ST) provided the exemption for car parking for general public only. However, the same has become taxable w.e.f 01-Apr-2013.
Service tax applicability from July'12 to Mar'13--
On a conjoint reading of section 65B(44) and mega exemption, it was taxable in your case, since the parking is only for your employees and not the general public at large.
Service tax applicability from April'13 onwards--
Still, the same is taxable by after interpretating section 65B(44) only.
In nutshell, in today's scenario if an activity is not defined under negative list(section 66D) or mega exemption, then the same is subjec to service tax.
Therefore you are liable to pay service tax
Earlier Position:
Mega exemption notification no. 25/2012-ST dated 20.6.2012 exempted this parking facility under serial no. 24, which read as follows:-
“24. Services by way of motor vehicle parking to general public excluding leasing of space to an entity for providing such parking facility”
The implication of this entry in mega exemption notification was that where the parking was meant for common man, no service tax was levied.
Amendment & its implication:-
Now, vide notification No.3 /2013 - Service Tax, dt. 1st March, 2013, the above entry no. 24 has been deleted. The deletion of this entry has brought all types of paid-parkings into the service tax net. Thus, whether the parking space is leased or not, whether it’s a public utility area or commercial area service tax has to be paid.
Thanks & regards
Ganesh babu k