renting of vacant land in a mine.

[NEERAJ KUMAR, RANCHI]

If some mine owner lets out   some portion of the vacant land of his mine  to some person for storing his goods in lieu of monetary consideration. Is such kind of service leviable to service tax . Kindly reply.

[YAGAY and SUN]

If it is being used for furtherance of business then service tax would be applicable, otherwise not.

[NEERAJ KUMAR, RANCHI]

Mr Khatri,

In fact my concern in the question is : since it is a vacant land and with in a mine,  so in view of this whether this will be taxable or not. Further as evident from my question that it is used for commercial use and in liew of monetary consideration so it is definitely for furtherance of business.

[YAGAY and SUN]

Dear Sir,

I understood your point.  Mines do not come under the definition of Building.  But there is no such exemption available in the Negative list and under Mega Notification.  Hence, service Tax may be applicable.

Regards,

Pradeep

[NEERAJ KUMAR, RANCHI]

Thanks for your kind reply. Please refer to your second reply, position after 01.07.2012 is clear but what about the period prior to 01.07.2012. My concern is for the period for the period prior to 01.07.2012.

[CASeetharaman KC]

Prior to 01-07-2012 the principle followed was whether the particular service was specifically included or specified in the list of services. Now from the discussion it is evident that this was not featuring anywhere in the taxable services list and hence should not be subject to Service tax for earlier period when the Negative List concept was not in vogue. The department is likely to take a different stand as always, you may have to fight it out

[CASeetharaman KC]

Further to my reply earlier the definition of Immovable property specifically excludes land used for Mining from its purview so we could argue that the rent would not be subject to service tax for the period before 01-07-2012, but the fact remains that the land is being used for storage purposes and this is the point on which the Department would probably argue on.The relevant portion of the definition is as reproduced below:

65(105)(zzzz) - Renting of Immovable Property

Any services provided or to be provided to any person, by any other person, by renting of immovable property or any other service in relation to such renting, for use in the course of or, for furtherance of, business or commerce

Explanation 1.—For the purposes of this sub-clause, "immovable property" includes—

(i) building and part of a building, and the land appurtenant thereto;

(ii) land incidental to the use of such building or part of a building;

(iii) the common or shared areas and facilities relating thereto; and

(iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate, but does not include-

      (a)vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes;

AI Summary

Renting of immovable property: lease of vacant mine land for commercial storage may attract service tax despite mining exclusion.
Renting vacant land within a mine for commercial storage is likely taxable under the negative-list regime because renting of immovable property for business is a service and no specific exemption for mine land exists; prior to the negative-list era, the exclusion of land used solely for mining supports an argument against taxability, though the department may dispute that exclusion where the land is used for storage.