Mall parking facilities for visitors not liable for service tax under renting of immovable property service

CESTAT Kolkata held that appellant was not liable to pay service tax on mall parking facilities provided to visitors. The tribunal ruled that land used for parking purposes does not fall under "renting of immovable property service" for service tax purposes. Since appellant did not recover parking charges from tenants/shop owners or their employees, no service tax was payable. The demand for service tax on car parking charges was set aside, penalty was not imposable, and the appeal was allowed with the impugned order being overturned.

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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.

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