Civil work to Service tax and VAT

[Guest]

If we carry out civil works for Government organization

1- Service tax is exempted

2- If not we also have to charge VAT on and above service tax ?

Thanks

[Ganeshan Kalyani]

Refer Notification no.25/2012-Service Tax dated 20.06.2012 as amended from time to time.

[Rajagopalan Ranganathan]

Sir,

Sl. No. 12 of mega exemption Notification No.25/2012-ST dated 20.6.2012 as amended states that-

Services provided to the Government, a local authority or a governmental authority by way ofconstruction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -

(a) ³⁸[omitted]

(b) a historical monument, archaeological site or remains of national importance, archaeological excavation, or antiquity specified under the Ancient Monuments and Archaeological Sites and Remains Act, 1958 (24 of 1958);

(c) ³⁸[omitted]

(d) canal, dam or other irrigation works;

(e) pipeline, conduit or plant for (i) water supply (ii) water treatment, or (iii) sewerage treatment or disposal; or

(f) ³⁸[omitted]

Vat is applicable only when any property (movable or immovable) is transferred during the course providing the service.

AI Summary

Service tax exemption for government construction services confirmed; VAT applies only if property transfer occurs during the service. Services by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration provided to the Government or a governmental authority are exempt from service tax under the mega-exemption framework. VAT becomes applicable only where there is a transfer of property, movable or immovable, occurring in the course of providing the service; without such a transfer, VAT does not apply.