TaxTMI 
TaxTMI 
2025 (6) TMI 1879
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....hat by virtue of Section 66D (a) read with Section 65B(49) of the Act, "Renting of Immovable Property" provided by Government to a business entity is treated as a "Support Service" which is not covered under "Negative List of Service" under Section 66D (a) and is subject to levy of service tax under the forward charge mechanism. 2. The appellant is a Government of Rajasthan Department, responsible for grant of Petroleum Exploration Licenses and Petroleum Mining Licenses for Oil, Gas and Coal Bed Methane and collection of revenue from Hydrocarbon sector related to royalty and other dues. The present appeal has been filed by the appellant before this Tribunal against the confirmation of the show cause notice dated 16.10.2018 for service tax liability of Rs.1,657.71 Crores. 3. The issues raised relates to classification of service of grant of mining rights by Government and taxability of Government service as per Section 66D (a) of the Negative List. 4. Heard both sides and perused the records of the case. 5. The learned Counsel for the appellant referring to the various provisions of the Finance Act has pointed out that the Department has taken self-contradictory view as ....
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....d Mineral Concession Rules, 1986, the Bench observed as under:- "45. The Revenue alleges that royalty and dead rent is the consideration paid for providing renting of immovable property services. The act of entering into a lease agreement for grant of mining rights arises out of statue, namely, Mines and Minerals (Regulation and Development) Act, 1957 as well as the Rajasthan Minor Minerals Concession Rules, 1986. No amount other than the charges specified in the Acts/Rules can be collected. The conditions that can be incorporated in the agreement are also prescribed by giving a Modal Agreement. The assessee who is the service provider thus has no say in the terms and the conditions of the agreement or on the charges that may be collected from the lessee. For that matter, the lessee who is the service recipient also has no say as to the terms or the consideration that has to be paid. Everything flows from the statute. The clarification issued by the Board under the new Tax regime w.e.f. 01.07.2012 explaining the application of definition of "support services" lays down that services provided by Government in the nature of grant of mining rights or licensing rig....
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....course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever -and shall include- advertisement and promotion construction or works contract, renting of immovable property, security, testing and analysis. 54. The means part mentions five services. The third part which is the includes part gives a list of services. The middle part explains the category of services which can be accommodated along with other services in the includes part and means part. The middle part uses the word "any other support of any kind". These words "any other support of any kind" are general words. However, this is expressly followed by the words "comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing". Therefore, only those services which fit into the category of services which business entities can render by themselves can find place in the means part and "includes part" of the definition. In other words, the middle part fixes the category of services that would fall within the "means part" and "includes part" of the definition. The middle part applies t....
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.... Moreover, the recovery of such service tax in terms of the decision of the High Court has been stayed by the Apex Court 2018 (10) GSTL J-167 (SC). 11. Considering the change introduced in Section 66D(a) of the Negative List whereby the words "Support Services" were omitted with effect from 1.04.2016 and the words "any service" were inserted, read with Rule 2(1)(d)E of Service Tax Rules, 1994, which remained unchanged and the collection of service tax on "Renting of Immovable Property" continued on forward charge basis, even after 01.04.2016, the Bench accepted the submissions of the appellant that when there is no change in law as to the person liable to pay service tax, the Revenue cannot collect service tax from the assessee on forward charge basis for the period 01.07.2012 to 31.03.2016 and under reverse charge basis from the lessee on the very same service after 01.04.2016. This shows that lease of land for mining purpose is not a "Support Service". The relevant paragraph reads as under:- "56. The above analysis of the definition would throw more light on the argument advanced by the assessee that though liability to pay service tax on renting of immovable pr....