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

Taxability of infrastructure services: pipeline construction for public water supply not treated as commerce, so not taxable.
Laying of water pipelines for a governmental water-supply board is not taxable where the pipeline is not primarily used for commerce or industry because the main purpose is supplying water to citizens and any purchase/sale is incidental; therefore such construction services fall outside service tax liability and related extended-period demands and penalties are not sustainable.