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July 2012

Construction services — Construction completed before the introduction of Service tax on such services — However, completion certificate obtained by the appellant after the introduction of the levy — Held, it is a very small part of the contract and for that reason Service tax cannot be demanded.

By Puloma Dalal
Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
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42. (2012) 26 STR 367 (Tri.-Del.) Ashokumar Jain v. CCE, Indore.

Construction services — Construction completed before the introduction of Service tax on such services — However, completion certificate obtained by the appellant after the introduction of the levy — Held, it is a very small part of the contract and for that reason Service tax cannot be demanded.


Facts:

The appellant was a construction service provider (a civil contractor). The appellant had undertaken a works contract of constructing 10 flats prior to levy of Service tax. However, the payment was realised post levy of Service tax on construction services. The Department levied Service tax on the amount received post the introduction of the levy by the appellant.

Held:

The construction was completed long before Service tax was imposed on construction services. Even if the procuring completion certificate was the responsibility of the appellant, it was a very small part of the contract. For this reason, Service tax could not be levied.

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