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2020 (6) TMI 84 - HC - VAT and Sales TaxLevy of VAT - Renting of space - Transfer of Right to use - transfer of “right to use” of the space to the mobile service providers as these companies were having access of the equipment, infrastructure and space for their use - whether within the scope of VAT or not - Section 48-A of the TNVAT Act, 2006 - HELD THAT:- The petitioner is a provider of “Passive Infrastructure Service” for the Mobile Telecommunication Operators (MTO). The petitioner acquired such facilities from existing Mobile Telecommunication Operators (MTO). The petitioner was incorporated with view to reduce the cost of telecom service provided by Mobile Telecommunication Operators (MTO). Thus, same shelter and tower could be used by two or more Mobile Telecommunication Operators (MTO) to receive and transmit signals. The petitioner has not only offered facility to mount the mobile operator’s RF antenna at a particular height and direction on the top of the tower and offered required level of temperature (i.e) below 35 degree Celsius as to protect the equipments - Apart from that the petitioner has also offered Uninterrupted Power Supply (UPS) for converting electricity AC current from 220, Volts AC current into (-) 48 DC which is essentially required to run the mobile operators transmission equipments without disruption. This activity is performed by Power Management System of the petitioner. Reliance can be placed in the case of M/S. ASCEND TELECOM INFRASTRUCTURE PVT. LTD., (FORMERLY KNOWN AS M/S. ASTER INFRASTRUCTURE PRIVATE LIMITED) VERSUS THE ASSISTANT COMMISSIONER (CT) , COMMISSIONER OF COMMERCIAL TAXES, THE GOVERNMENT OF TAMIL NADU, SERVICE TAX GROUP – I, UNION OF INDIA [2020 (6) TMI 57 - MADRAS HIGH COURT] where it was held that The business model is not based on exclusivity. It is on a shared usage basis of the facility viz., passive infrastructure consisting of temporary shelter, Mast, AC, Genset etc. Therefore, there is no “deemed sale” within the meaning of Article 366(29-A)(d) of the Constitution of India and Secion 2(33)(iv) of the Act so as to attract a charge under Section 4 of the TNVAT Act, 2006. - the reasoning given in the case is fairly applicable to the facts of the present Writ Petitions. Petition allowed.
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