13 August 2014
Client who is state Govt road transport corporation specially engaged in passenger transport i.e public transport company. Corporation has given permission to the various book stalls, fruit stalls, canteen inside the premises of bus stand area and collected "license fee" as rent of such stalls (small shops) service tax is collected under Renting of Immovable property service.
However the corporation is also issuing licences to hawkers (i.e. individual feriwalas) granting permission to sale their goods at bus stand area for a minimum licence fee. Now service tax dept has issued notice to tax such licence fee under ambit of Renting of Immovable Property. As the corporation is allowing permission only to sale the hawkers good. No specific place/area is allowed to hawkers. Objective of issuing such licence is only to facilitate proper administration over hawkers and for effective control over them. Corporation has prescribed specific dress code to hawkers and given batches to them. Hawkers are using open land of bus stand and entry to such area is open to common public at large.
Issue is whether Licence fee of hawkers will come under ambit of service tax under Renting of immovable property.
Kind request to all please share your views regarding this issue.
CAclubindia
