2026-VIL-1223-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Construction of multi-level parking for local authority – Demand of service tax on construction of a multi-level parking built for Municipal Corporation to provide parking facilities to the public – Revenue case that the activity was commercial in nature and not covered by Notification No. 25/2012 whereas Respondent contended the construction was for public benefit and fell within the exemption provisions for services provided to local authorities for construction of original works meant for use other than commerce, industry or business - Whether construction of a multi-level parking for a local authority for providing public parking facilities constitutes a taxable service or qualifies for exemption under the notification – HELD - The construction of a multi-level parking by a local authority for providing parking facilities to the public at large is not a commercial activity and therefore not subject to service tax. Providing public parking facilities is one of the main objectives of a Municipal Corporation and constitutes a welfare measure for public convenience aimed at public benefit rather than profit generation. Even though nominal fee may be collected from users, such collection does not convert the activity into a commercial undertaking as providing public amenity cannot be for generating profit – The services provided to a local authority for construction of original works meant predominantly for use other than for commerce, industry or business are expressly exempted under para 12A of Notification No. 25/2012 - The issue is well-settled by consistent Tribunal decisions in similar cases involving construction of multi-level parking for development authorities - The impugned order of Commissioner (Appeals) is upheld and the Revenue's appeals are dismissed
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