Public-use construction exemption applied to multi-level parking built for a local authority, excluding service tax liability.

Construction of a multi-level parking facility for a local authority was treated as exempt, because the work was characterised as original works meant predominantly for non-commercial public use. The facility was described as a public amenity for Chandigarh Administration, intended to provide parking for the public, decongest traffic, and improve parking availability rather than generate profit. On that basis, the activity fell within Notification No. 25/2012-ST for services supplied to a local authority by way of construction of original works used mainly other than for commerce, industry, business, or profession, and service tax was held not payable.

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Issues: Whether construction of a multi level parking for a local authority was taxable service, or was exempt as construction of original works meant predominantly for use other than commerce, industry, or any other business or profession under Notification No. 25/2012-ST dated 20.06.2012.

Analysis: The construction was undertaken for Chandigarh Administration to provide parking space to the public at large and not for profit. The parking facility served a public amenity function of the municipal authority and was intended to decongest traffic and improve public parking availability. On that basis, the activity fell within the exemption for services provided to a local authority by way of construction of original works meant predominantly for non-commercial use.

Conclusion: The construction of the multi level parking was not liable to service tax and the exemption applied; the Revenue's challenge failed.

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