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Parking peeve: Contractors may collect service tax soon

Delhiites may now have to pay service tax to park their vehicles in the city. Acting on a union finance ministry directive, the standing committee of South Delhi Municipal Corporation is all set to lead by example in the case. On Tuesday, the south civic body directed the commissioner to issue orders to parking contractors on the guidelines issued by the union finance ministry on the subject.

'The corporation has nothing to do with the service tax as it is completely a matter of the central government which is applicable for the entire country. The commissioner is directed to decide on his own,' said Rajesh Gehlot, chairman of the standing committee of South DMC on Tuesday, referring the matter to the commissioner.

He further added that the standing committee and house interferes only in matters which are related to the corporation, but this issue has nothing to do with the corporation.
Presently, the corporation charges parking fees at the rate of Rs 7 for parking of two wheelers and Rs 10 for cars for a period of 10 hours.

According to the directions of the union finance ministry, parking has been put under the net of service tax from the 2013-14 financial year and service tax at the rate of 12.5 per cent has been imposed on parking.

Thus the new parking slip will have a mention of 12.5 per cent service tax which translates into an increase in parking fees of 0.87 (approximately one ruppee) for bikes and Rs 1.25 for cars.
'The service tax is collected by the service provider, in this case the contractors. We have no say in the matter.

The service provider, like other service providers, will collect it and submit it to the service tax department of the union finance ministry,' said Manish Gupta, commissioner of South DMC.
He further added that the rule is applicable in the entire country and service providers will have to submit it from the current financial year.
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