CESTAT directs Redetermination of Quantum of Service Tax leviable on Rents of Marriage Hall, Stall Ground Rent, Hospital, Blood Bank [Read Order]

CESTAT - Redetermination - Quantum - Service tax leviable - Rents - Marriage Hall - Stall Ground rent - Hospital - Blood bank - Taxscan

The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed the redetermination of Quantum of Service Tax leviable on Rents of Marriage Hall, Stall Ground Rent, Hospital, and Blood bank.

In respect of the services under the category of Renting of Stall etc., it is the submission of the appellant, Mira Bhaindar Municipal Corporation that the amount collected by them is fees for providing small space to the street hawkers etc, for selling their goods etc., and is part of their Constitutional Duty for the upliftment and social welfare of the poor. 

It has also be submitted on the basis of the decisions of Hon’ble Supreme Court, wherein it has been held that street vending and selling is fundamental right of such hawkers and as per directive of the Hon’ble Supreme, Rules and Regulations have been framed to provide for the street vending and space for street hawkers. In terms of these rules and regulations some minor fee is levied for upkeep and providing facilities to such street hawkers. To the extent the space is provided to the poor for the purpose of street vending and street hawking, we would agree with the submission made by the appellant, but the same cannot be true in case of the shops and stalls rented out.

The coram of Technical Member, Sanjiv Srivastava and Judicial Member Dr. Suvendu Kumar Pati agreed with the observations made by the Commissioner to the effect that just because the services under consideration have been provided by the Municipal Authority, the same cannot be said to be a service covered under Article 243 read with Schedule 12 of Constitution of India. Hence the arguments advanced by the appellant counsel to that effect cannot be sustained, more so over when they themselves have admitted their liability to pay service tax in respect of services under category of BOT, Mandap & Renting of Space to Blood Bank.

“In respect of the services under the category of Renting of Stall etc., it is the submission of the appellant, that the amount collected by them is fees for providing small space to the street hawkers etc, for selling their goods etc., and is part of their Constitutional Duty for the upliftment and social welfare of the poor. It has also be submitted on the basis of the decisions of Hon’ble Supreme Court, wherein it has been held that street vending and selling is fundamental right of such hawkers and as per directive of the Hon’ble Supreme, Rules and Regulations have been framed to provide for the street vending and space for street hawkers. In terms of these rules and regulations some minor fee is levied for upkeep and providing facilities to such street hawkers. To the extent the space is provided to the poor for the purpose of street vending and street hawking, we would agree with the submission made by the appellant, but the same cannot be true in case of the shops and stalls rented out. Contrary has been held by the Mumbai Bench in the case of Murmogoa, referred earlier by us. In our view the matter needs to be reconsidered by the original authority and suitable determination made,” the CESTAT said.

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