The auction of paid parking lots,organised by the Municipal Corporation,on Tuesday turned out to be a flop show as the contractors refused to participate. The reason: the recent directions to impose 12.36 per cent service tax on the contractors. The contractors are now demanding that the reserve price of the parking lots be reduced in view of the service tax.
A total of five paid parking lots were to go under the hammer on Tuesday. These included a parking lot in Sector 22-B opposite the bus stand and another one adjoining Piccadily in Sector 34. A parking lot in Sector 8 (Zone I),near Fun Republic and MOH parking lot in Sector 17 were among the others that were to be auctioned. None of these found any takers.
The contractors refused to participate stating that they would not pay the service tax that has been imposed. The contractors have demanded that the parking charges be increased so that the recovery of tax can be made from the commuters. The Central Excise and Taxation Department had recently served notices to the Municipal Corporation and Estate Office for recovery of service tax.
Joint Commissioner,Municipal Corporation,Rajiv Gupta said,None of the contractors participated in the bidding process. They have expressed their unwillingness to pay 12.36 per cent service tax. The proceedings for the auction would be prepared and then a discussion would be held on the action to be taken. The policy for the auction may have to be reframed.
The contractors are saying that the reserve price be reduced if they have to pay service tax or the rates for paid parking being charged be increased. For considering these issues,the matter will have to be taken up before the Finance and Contract Committee of the MC. A decision will also be required to be taken on whether the contractors will be allowed to continue holding the parking lots for the time being or not.
The Municipal Corporation had proposed converting parking lots in several areas into paid parking lots. Sites had been identified at some places,including those in Industrial Area. However,with even the existing parking lots finding no takers,the process of converting the others is likely to be delayed.