TaxTMI 
TaxTMI 
TaxTMI 
In one of the orders in Service Tax by CESTAT, Bombay Bench, it has been held that renting of vacant land for construction of port and marine related activities is to be considered as activities for use in the course or furtherance of business or commence and such use is liable to levy of Service Tax thereon. The same logic would prevail in GST regime as supply of goods or services or both in the course of or for furtherance of business or commerce is a taxable supply under section 7 of the CGST Act, 2017 and shall be liable to levy of applicable GST thereon.
In JSW Steel Ltd Versus Commissioner of Service Tax -VII, Mumbai - 2025 (8) TMI 1556 - CESTAT MUMBAI, land was leased specifically for purpose of constructing port and carrying out port and marine related activities in 2007-08 but the Department contended that lease of land was for use in course or furtherance of business or commerce.
The original adjudicating authority did not confirmed the demand on the ground that the vacant land has been leased specifically for purpose of constructing port and carrying out port and marine related activities only and hence the transaction under reference will be covered under the exclusion clause of Section 65(105)(zzzz) of Finance Act, 1994 vacant land, whether or not having facilities clearly incidental to the use of such vacant land”.
The Revenue preferred an appeal to Commissioner (appeals) who confirmed the demand and set aside the original order discarding the finding that the intention to use ‘vacant land for construction of port and mainland related activities’ was not for furtherance of business or commerce by relying upon Circular [No. 151/2/2012-ST dated 10th February 2012] of Central Board of Excise & Customs (CBEC) as well as on decision of the Honble High Court of Gujarat in CINEMAX INDIA LIMITED THROUGH DIRECTOR Versus UNION OF INDIA THROUGH SECRETARY - 2011 (8) TMI 71 - GUJARAT HIGH COURT.
Further, the demand pertains to ‘interest free deposit’ received from the lessee that was held to be consideration for ‘renting of immovable property service’ an activity which undergone several changes ever since its incorporation in section 65(105) of Finance Act, 1994. It was further contended that while lease deed had been entered into on 15th January 2008 the demand was fastened on the basis of amendment of 1st July 2010 and the tenure of which was prospective application as settled by Honble High Court of Allahabad in affirming the decision of the Tribunal in M/s. Greater Noida Industrial Development Authority Versus CCE & ST, Noida - 2014 (9) TMI 306 - CESTAT NEW DELHI and by the Tribunal in Commissioner of Central Excise & Service Tax, Goa Versus Mormugao Port Trust And Vice-Versa - 2015 (10) TMI 1736 - CESTAT MUMBAI, in Jawaharlal Nehru Port Trust Versus Commissioner of Central Excise, Raigad - 2017 (3) TMI 1221 - CESTAT MUMBAIand in M/s Rolex Rings Pvt. Ltd. Versus C.C.E. And S.T. Rajkot - 2019 (6) TMI 1069 - CESTAT AHMEDABAD.
The first appellate authority had not examined the nature of the impugned consideration which, admittedly, was ‘deposit’ that had to be returned at some point or the other; that it was ‘interest free’ would only imply that the ‘notional’ income thereon accrued to the appellant.
It was held that renting of vacant land by way of lease or licence (irrespective of the duration or tenure), for construction of a building or a temporary structure for use at a later stage in furtherance of business or commerce is a taxable service only from 1-7-2010, and not so, earlier to till date. Thus, giving of vacant land on licence, rent or lease for construction of structure at a later stage for furtherance of business or commerce became taxable only w.e.f. 1-7-2010 under Clause (v) of Explanation 1 to Section 65(105)(zzzz) and this activity was not taxable during the period prior to 1-7-2010.
The Tribunal thus held that the impugned order was without basis in law and was therefore, set aside while allowing the appeal.