Works Contract Service-Water Pipeline to MIDC

[Sumeet Tholle]

Dear All,

One of my client providing Service of laying down of water pipeline along with material (i.e. works contract service)  to Maharashtra Industrial Development Corporation (MIDC).

Onwards 01/07/2012, being MIDC is Governmental Authority, now it is exempt. But department demanding Service Tax prior to 01/07/2012.

Is there any case law, Circular etc. ?

Request you to guide.

Thanks.

CA Sumeet Tholle

 

AI Summary

Service Tax Exemption for Water Pipeline Works Contracts to MIDC Upheld; Appeal Allowed, No Further Tax Required A client providing works contract services for laying water pipelines to the Maharashtra Industrial Development Corporation (MIDC) is exempt from service tax from 01/07/2012, as MIDC is a governmental authority. However, tax was demanded for services provided before this date. A referenced case involving the Gujarat Water Supply and Sewerage Board (GWSSB) found that laying pipelines for water supply is not taxable as it is not primarily for commerce or industry. The Tribunal upheld this view, emphasizing that the primary purpose was supplying water to citizens, not commercial profit. The appeal was allowed, negating the need for further tax or penalties.