According to the recent announcement of Ahmedabad Municipal Corporation (AMC)’s Parking Area Policy, city malls and commercial complexes that impose parking fees on visitors will now be subject to property tax for their dedicated parking spaces. This policy, which was unveiled on Wednesday, brings about a significant change in the taxation of parking facilities within the city.
The key point of this policy is that property tax will not be applied to parking spaces in residential properties or commercial properties where parking services are offered for free. Furthermore, the policy introduces exemptions for certain specific scenarios. Jainik Vakil, Chairman of the Ahmedabad Municipal Corporation’s revenue committee, explained that residential areas such as bungalows or tenements using temporary sheds or sunshades for parking, even if they may be considered illegal structures, will not incur property tax charges for their parking spaces.
Also read: Haryana Govt’s Tax Amnesty: Waives Rs 8,000 Crore in Interest and Penalties on Property Tax Dues
A notable technical aspect clarified by the Chairman of the Revenue Committee of the AMC is that the total runway space, which includes the areas for the movement of vehicles and access ramps within the parking facilities’ basements, will be exempt from the property tax. He emphasised that this exemption applies to about 35% of the overall dedicated parking space.
Prior to the introduction of this policy, there were instances where property tax assessors in different municipal zones used their discretion to exempt certain commercial properties from property tax on dedicated parking spaces. This was due to a lack of a clear policy that defined which establishments should be liable for property tax related to dedicated parking spaces. A senior AMC official pointed out that, during field visits, discrepancies were identified in various municipal zones. In some areas, commercial properties like malls or private hospitals that charged parking fees were exempt from property tax for the parking area, while in other areas, property tax was being levied.
In response to these inconsistencies, a circular has been sent to the zonal offices to ensure the immediate implementation of this newly established Parking Area Policy. This policy marks a significant step toward creating a more transparent and consistent tax framework for dedicated parking spaces within the city’s malls and commercial complexes.
The Authority of Advance Ruling (AAR) of West Bengal ruled that the supply of services for the right to use car parking space would be taxable @ 18%.The authority observed that the provision of services for the right to use a parking space is a separate supply and should not be perceived as a composite supply of construction of residential apartments. Read More: Sale of Residential Apartments to Buyers does not include Parking Space in Composite Supply, subject to 18% GST: AAR
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
