Renting of parking space by Railways , bus stations

[vasudevan unnikrishnan]

In the mega exemption  notification  no. 25/2012-ST dated 20/06/2012, the  entry  at sl. No.24 there under reads—

“ Services by way of vehicle parking to general public excluding leasing of space to an entity for providing such parking facility”.

The Railway  station,bus station etc provide such services.However,iIn   many of such  cases, the authorities may entrust the job of collection of the parking fees to an outside agency through an agreement that irrespective of actual collection, the agency shall pay a fixed monthly charges to   the authority. In the above situation, it can never be construed as a lease of the space for parking and thus exempted. However, whether the authority will be taxable for ‘renting of immovable  property” ?. Here the para  6.1.1 of the Education Guide states that the negative list specifies that renting of vacant land, with or without a structure incidental to its use, in relating to agriculture ‘ only. Thus it would appear that the vacant land  in public places owned by the Railways, state transport bus stations, etc, allowed to be used for parking  of vehicles  will all get covered under the taxable service of Renting of Immovable property.

Expert advice solicited.

AI Summary

Are Parking Spaces Rented by Railways and Bus Stations Exempt from Service Tax? Mega Exemption Notification Clarified. A query was raised regarding the applicability of service tax on parking spaces rented by railways and bus stations. The discussion referenced the mega exemption notification, which exempts vehicle parking services provided to the general public from service tax, except when leasing space to an entity for parking facilities. The question was whether such arrangements constitute 'renting of immovable property,' which is taxable unless exempt. The response clarified that 'renting of immovable property' includes allowing usage of property and is taxable unless it falls under specific exemptions, such as renting to non-business entities or for agricultural purposes.