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April 2008

Technical Testing and Certification as Statutory Functions

By Puloma Dalal, Bakul B. Mody, Chartered Accountants
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8. Technical Testing and Certification as Statutory
Functions :



  • Liability to Service Tax for statutory functions — Appellant is a State
    Government Department carrying on sovereign activity of inspection and
    certification of electrical installations as per law — Tribunal decisions
    holding sovereign function cannot be subject matter of Service Tax, applicable
    — C.B.E.&C. Circular dated 18-12-2006 clarifying statutory activities of
    sovereign/public authorities not liable to Service Tax, applicable — Bona
    fide     view on non-liability and demand hit by time bar — S. 65(108), S. 66
    and S. 73 of the Act.



  • Departmental Clarification — Retrospective applicability — CBE&C Circular
    dated 18-12-2006 clarifying statutory activities of sovereign/public
    authorities not liable to Service Tax — Impugned circular being beneficial to
    assessee, applicable retrospectively.


[Electrical Inspectorate, Govt. of Karnataka v. CST, (2008) 9 STR 494
(Tri — Bang.)]


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