Scheme-based housing construction for jhuggi dwellers was held outside service tax under the exemption and clarificatory framework.

Construction undertaken for a centrally sponsored housing scheme for jhuggi dwellers was treated as outside service tax, because the activity fell within the exemption and clarificatory framework for scheme-based residential accommodation. The analysis turned on the definition of complex under Section 65(91)(a) of the Finance Act, 1994 and the position that such units, allotted at nominal rent or without consideration under schemes such as Rajiv Awas Yojna and Jawaharlal Nehru Urban Renewal Mission, were covered by Notification No. 28/2010-ST and Circular No. 125/2010-ST. Service tax was therefore not leviable and the demand could not be sustained.

---

---

Issues: Whether service tax was leviable on construction services rendered for housing accommodation provided under a centrally sponsored scheme for jhuggi dwellers.

Analysis: The activity was examined in the context of the definition of complex under Section 65(91)(a) of the Finance Act, 1994 and the explanatory position regarding residential units and personal use. The record showed that the accommodation was constructed under schemes such as Rajiv Awas Yojna and Jawaharlal Nehru Urban Renewal Mission for allotment at nominal rent or without consideration. The decision also relied on Notification No. 28/2010-ST dated 22nd June, 2010 and Circular No. 125/2010-ST dated 30th July 2010, which clarified exemption for such scheme-based constructions.

Conclusion: Service tax was not leviable on the impugned construction activity, and the demand could not be sustained.

Final Conclusion: The appeal succeeded and the impugned order was set aside, granting relief to the appellant.

Ratio Decidendi: Construction undertaken for a centrally sponsored housing scheme for poor beneficiaries, falling within the exemption/clarificatory circular framework, is not exigible to service tax.

---