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April 2009

Reference from Commissioner, Nashik, seeking clarification in respect of levy of Service Tax on repair/renovation/widening of roads. Circular No. 110/2009, dated 23-2-2009

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi, Tarun Ghia, Nimesh Dedhia, Vijay Kewalramani
Chartered Accountants
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7 Reference from Commissioner, Nashik, seeking
clarification in respect of levy of Service Tax on
repair/renovation/widening of roads. Circular No. 110/2009, dated 23-2-2009
:

It has been clarified that management, maintenance or
repair of roads are in the nature of taxable services and attracting Service
Tax u/s.65(105) (zzg) of the Finance Act, 1994. In this Circular, activities
called as ‘construction of road’ and ‘maintenance or repair of roads’ have
been categorised as follows :

(A) Maintenance or repair activities :

I. Resurfacing

II. Renovation

III. Strengthening

IV. Relaying
 
V. Filling of potholes

(B) Construction activities :

I. Laying of a new road

II. Widening of narrow road to broader road (such as
conversion of a two-lane road to a four-lane road)

III. Changing road surface (gravelled road to metalled
road/metalled road to black-topped/ black-topped to concrete, etc.)

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