CESTAT upholds Service Tax Demand towards ‘Pay and Park’, ‘Bazar auction/ Bazar Fees’ and Rasta Nuksan Bharpai/ ROW [Read Order]

CESTAT - Service Tax Demand - Pay and Park - Bazar auction - Rasta Nuksan Bharpai – ROW - Taxscan

The Mumbai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT)  upheld Service Tax Demand towards “Pay and Park”, Bazar auction/ Bazar Fees” and Rasta Nuksan Bharpai/ ROW.

The Appellant,  Mira Bhaindar Municipal Corporation opted to develop certain facilities of playgrounds, town parks and schools through Contractor on Built, Operate and Transfer (BOT) basis. Said reservations after development were to be operated by the contractor and were eventually to be transferred to the Appellant after expiry of the terms of the Agreement dated 22nd June 2007 with Vardhman Developers, for development and reservation of town park on BOT basis and granted lease of land for a period of 30 years. Further, the Appellant has entered into an agreement dated 31 July 2007 with Shreeji Exhibitors for development of a plot of reservation exclusively for the playground on BOT basis. 

Similarly, the Appellant has entered into an agreement dated 18 July 2007 with Deepak Charitable Trust for development of a plot for primary school and playground on BOT basis. All such developmental activities undertaken by the Appellant are covered within the Twelfth Schedule of the Constitution of India under Urban Planning for Economic and Social Development. Thus, being a function covered by the Twelfth Schedule of the Constitution of India, this is covered by the negative list and not liable to service tax.

The coram of Technical Member, Sanjiv Srivastava and Judicial Member Dr. Suvendu Kumar Pati held that order of adjudicating authority in respect of the demands made under the head “Pay and Park”, Bazar auction/ Bazar Fees” and Rasta Nuksan Bharpai/ ROW, is upheld.

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