TaxTMI 
TaxTMI 
TaxTMI 
An article by:-
CA. Pradeep Jain
CA. Preeti Parihar
Aashish Bohra
Introduction:-
“Even if you are taking an accident victim to hospital, you will have to pay service tax before getting him admitted to hospital”. This statement has come true by virtue of the budget, 2013 as announced by hon’ble finance minister on 28.02.2013. Earlier when the concept of negative list came into force through budget 2012, certain services were listed in the negative list as well as in the mega exemption notification no. 25/2012-ST dated 20.6.2012 which were exempted. One such service listed in the mega exemption notification was “Services by way of motor vehicle parking to general public excluding leasing of space to an entity for providing such parking facility” was also exempted. By virtue of this budget, this exemption has been removed. This piece of article is about the negative impact of this amendment.
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.
While concluding:-
It is not the intention of the government to levy service tax on the public utility service areas, hospitals, etc. This amendment is not intended to impose the tax on these areas which itself are exempted under negative list or in mega exemption notification. However, the impact of this notification is very critical and is levying the service tax on these places also. Hope a clarification comes soon for the same, else poor public will be the sufferer.
Although we know that intention of government is not to put unnecessary tax burden on the general public but the said amendment has to be reviewed so that no one has to pay service tax before getting treatment form hospital or getting cash from bank for ones children’s school fee.