TMI Blog2013 (1) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... vity as per a mandate in an Act of the legislature by itself cannot take away the character of service from the activity. If that is not the case transportation functions done by Indian Railways would not amount to service. Considering such legal aspects and also in view of the fact that the appellant is an Authority set up by a State Government, which should not be put to hardship that may be caused by ordering pre-deposit in such a matter involving basic legal issues, it is proper to grant waiver of pre-deposit of dues for admission of appeal. Further there shall be stay on collection of dues arising from the impugned order during the pendency of the appeal. - ST/3256/2012-CU(DB) - - - Dated:- 8-11-2012 - Archana Wadhwa And Mathew John, JJ. Appellant Rep by: Shri J.K. Mittal, Adv. Respondent Rep by: Shri R.K. Mathur, DR Per: Mathew John: The appellant, Greater Noida Industrial Development Authority (GNIDA) is a body established under the Uttar Pradesh Industrial Development Act, 1976 by notification issued under section 3 of the said Act to develop certain notified areas as a planned industrial township. It functions as an arm of the State Government throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Tribunal. 4. The Counsel for the appellant submits that the transferring of land done by the appellant, on long term lease basis, is a function undertaken as a sovereign under a statute that is under section 6(f) of UP Industrial Area Development Act, 1976 and its activities cannot be classified as services to the lessees notwithstanding the fact that some charges are collected from persons to whom land is given on long term "lease". 5. He contends that one time charges collected by the appellant are towards cost of the land and recurring charges are towards maintaining the municipal functions assigned to the appellants under the Act. One time charges are akin to sale price which cannot be charged to service tax and annual charges which are towards municipal services cannot be charged to service tax under the head for rent for immovable property. 6. He further points that though the transfer of the property is referred to as "lease" for convenience, in actual substance it is like sale and not like renting which is for short duration. Lease given by the appellant is a long term lease for 90 years and the nature of transaction is like sale of the property and not in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice pertaining to renting of immovable property, the renting of vacant land used for agriculture, farming, forestry, animal husbandry, mining, education, sports, circus, entertainment and parking purposes, is excluded from the purview of service tax. Further, 'vacant land', whether or not having facilities clearly incidental to the use of such vacant land has also been excluded from the tax net. 10.2 It has been reported that in many states, the local industrial corporations or PSUs or even private organizations rent vacant land on a long term leases with an explicit understanding that lessee would construct factory or commercial building on that land. In such cases the ownership of the land is not transferred to the lessee and thus it is a service provided by the lessor to the lessee. The situation is similar to renting out a constructed structure for commercial purposes except that at the time of executing the lease agreement the land is in a vacant state and that later the lessee constructs commercial structure thereon after executing the tease deed. Such lease agreements escape service tax because of the exclusion mentioned above. 10.3 Suitable amendment in the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... building and part of a building, and the land appurtenant thereto; (ii) land incidental to the use of such building or part of a building; (iii) the common or shared areas and facilities relating thereto; and (iv) in case of a building located in a complex or an industrial estate, all common areas and facilities relating thereto, within such complex or estate, (v) vacant land given on lease or license for construction of building or temporary structure at a later stage to be used for furtherance of business or commerce, but does not include - (a) vacant land solely used for agriculture, aquaculture, farming, forestry, animal husbandry, mining purposes; (b) vacant land, whether or not having facilities clearly incidental to the use of such vacant land; (c) land used for educational, sports, circus, entertainment and parking purposes; and (d) building used solely for residential purposes and buildings used for the purposes of accommodation, including hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities. Explanation 2. - For the purposes of this sub-clause, an immov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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