Free supply material excluded from gross service value for construction service exemption under Notification No. 15/2004-ST.

For exemption under Notification No. 15/2004-ST for Commercial or Industrial Construction Services, free supply material provided by the service recipient is not includible in the gross value of service. The analysis treats the issue as settled by a binding Larger Bench view, as affirmed by the Supreme Court, and applies that position to confirm eligibility for exemption and corresponding abatement. The stated effect is that valuation for the notification excludes recipient-supplied materials, reducing the taxable service value for the exemption calculation.

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Issues: Whether, for availing exemption under Notification No. 15/2004-ST in respect of Commercial or Industrial Construction Services, the value of free supply material provided by the service recipient is required to be included in the gross value of the service.

Analysis: The issue was treated as no longer res integra in view of the binding Larger Bench decision, as upheld by the Supreme Court, which held that free supply material provided by the service recipient is not to be included in the gross value for the purpose of Notification No. 15/2004-ST. On that basis, the appellant was found entitled to the exemption and corresponding abatement.

Conclusion: The value of free supply material was not includible in the gross value of service for the purposes of the exemption notification, and the appellant succeeded.

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