Works contract service tax was not leviable for pre-01.07.2010 construction activity, leaving the demand unsustainable.

Construction-related services under the category of works contract service were treated as not taxable for the period from 01.04.2009 to 30.06.2010. The Tribunal view and CBEC circulars were followed on the basis that such construction activity was not liable to service tax before 01.07.2010, and the issue was considered no longer res integra. The operative effect was that no service tax could be levied for the impugned period, so the demand could not be sustained.

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Issues: Whether service tax was payable on construction-related services rendered under the category of works contract service for the period from 01.04.2009 to 30.06.2010.

Analysis: The liability to tax for the relevant period was examined in the light of the settled Tribunal view and the CBEC circulars clarifying that construction activity of this nature was not taxable prior to 01.07.2010. The issue was treated as no longer res integra, and the consistent line of decisions holding that no service tax could be levied for the period before 01.07.2010 was followed.

Conclusion: No service tax was payable for the impugned period, and the demand could not be sustained.

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