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.)]
