Public limited companies may claim construction exemption, and bundled sanction-related services for a single house were treated as exempt.

AAR noted that a public limited company can seek the benefit of Notification No. 4/2013-SC because the exemption is not confined to private companies. It also treated the composite arrangement for obtaining municipal or local sanctions and constructing a single house for an individual as a bundled service. On the stated facts, the sanction-related activity was not found to be under a separate agreement, so it formed part of the exempt construction service and no service tax was payable.

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Issues: (i) Whether a public limited company could apply for and claim the benefit of the exemption under Notification No. 4/2013-SC dated 1st March, 2013. (ii) Whether, where the agreement covers obtaining municipal or local sanctions and construction of a single house for an individual as a bundled service, service tax is attracted.

Issue (i): Whether a public limited company could apply for and claim the benefit of the exemption under Notification No. 4/2013-SC dated 1st March, 2013.

Analysis: The notification was read as permitting even public companies to seek the exemption. The objection that only a private limited company could avail the benefit was rejected on the basis of the notification itself.

Conclusion: The applicant was held to be a proper applicant entitled to invoke the exemption notification.

Issue (ii): Whether, where the agreement covers obtaining municipal or local sanctions and construction of a single house for an individual as a bundled service, service tax is attracted.

Analysis: Construction of a single house for an individual was treated as exempt. The authority distinguished an independent agreement for obtaining sanctions, which would constitute a separate taxable service, from a bundled arrangement where sanction procurement and construction formed one composite arrangement. On the stated facts, no separate agreement for sanctions was found and the activity was treated as a bundled service covered by the exemption.

Conclusion: No service tax was held payable on the bundled arrangement of obtaining sanctions and constructing the individual house, and the activity was covered by the exemption notification.

Final Conclusion: The ruling accepted the applicant's eligibility and held that the composite arrangement of sanction procurement and construction of a single house fell within the exemption, leaving no service tax liability on the stated facts.

Ratio Decidendi: Where a notification grants exemption for construction of a single house and the related sanction-procurement forms part of one composite arrangement without a separate agreement, the bundled activity is covered by the exemption and is not separately taxable.

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