By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Construction of residential quarters for Central Government employees/police department/Pondicherry University not chargeable to service tax in view of exclusion clause under construction of complex services.
Facts:
The department contended that the activity of constructing residential quarters for Central Government employees/police department/Pondicherry University carried out by the appellants was leviable to service tax under construction of complex services. Further, the activity of construction of tower foundation for BSNL was leviable to service tax under construction of commercial or industrial construction services or works contract services. The appellants contested that they provided construction services to income tax and police departments for their own use and not for sale and therefore, service tax was not leviable.
Held:
It was an undisputed fact that the apartments/ houses were constructed for Pondicherry University and police department, which were used by them and were not sold by them. The Tribunal observed that since the complexes were meant for personal use, according to the exclusion clause, the services were not taxable. Further, since the lower adjudicating authority had accepted the stand of the appellants that the activity of construction of tower for BSNL was leviable to service tax under “works contract services” for the period from 01-06-2007 to 19-12-2009, the said activity cannot be taxed under commercial or industrial construction services for the period from January, 2006 to May, 2007.
