Support services by way of off-street parking or other facilities provided by local authorities to any business entity would be liable to service tax
The local authorities operating off-street parking facilities were not subjected to VAT/service tax in Ireland whereas commercial operators engaged in that activity were liable to VAT/service tax. The Commission of European Communities brought a suit for declaration that said exemption to local authorities was violative of Council Directives.
European Court of Justice held as under:
1) Services provided by Government or local authorities were excluded from charge of service tax to extent specified in negative list under section 66D(a);
2) Such negative list entry, being an exception to charge, was to be strictly construed;
3) Exclusions from negative list provided in clauses (i) to (iv) of section 66D(a) have to be liberally construed, as they were intended to restore general principle of charge of service tax on all services;
4) Therefore, support services by way of off-street parking or other facilities provided by local authorities to any business entity would be liable to service tax - COMMISSION OF THE EUROPEAN COMMUNITIES V. IRELAND  30 taxmann.com 234 (ECJ)