Now, pay service tax on parking in south Delhi

Parking in any south Delhi area is going to get more expensive, albeit marginally. The reason: You will have to pay a 12.36 per cent service tax every time you park your car in a municipal parking. Ritam Halder reports.

Parking in any south Delhi area is going to get more expensive, albeit marginally. The reason: You will have to pay a 12.36 per cent service tax every time you park your car in a municipal parking.

HT Image

This means, after rounding off your tax, if you paid Rs 10 for 10 hours earlier, you will now pay R11.

The commissioner of South Delhi Municipal Corporation, Manish Gupta, told Hindustan Times that the service tax department of the Union government has made service tax on parking compulsory, the notification for which came on April 1. "As per the Act, the service provider is duty-bound to charge from the consumers," Gupta said.

http://www.hindustantimes.com/Images/Popup/2013/7/17_07_13-metro2b.gif

The debate on who will pay the service tax — the corporation or the contractors — had brought the handover process of 39 parking sites to a standstill even though the retendering process had been completed over three months ago. Tuesday brought some clarity on the front, with the south corporation deciding that roughly 10% of the tax would be borne by the vehicle-owners. Who will pay the remaining amount is yet to be decided.

According to corporation sources, a circular will be issued from the municipal commissioner's office after which the contractors can charge parking fees, including the service tax.

The civic body, which had earlier collected a revenue of Rs 52 lakh per month from 39 of its sites, was supposed to earn Rs 1.14 crore, a jump of over 120 per cent after the April retendering process.

However, the service tax issue has caused a delay of three months in handing over the parking of intent and a monthly loss of Rs 1.14 crore.