applicability of service tax on manpower outsourcing to municipal corporation

[Asked by Guest]

Dear Sir,

We are engaging or labour through man power outsourcing agency for our Municipal Corporation which is a Local Authority for the maintenance of sanitation,street lights,parks,water supply,security personnel and computer operators etc.

In this connection I would like to know whether these services are exempted from the levy of service tax under the Act.

yours sincerely

Chakravarthy s.n.

AI Summary

Service tax exemption limited to water and sewerage related maintenance; other outsourced municipal manpower remains taxable.
Service tax on manpower outsourcing to a municipal corporation hinges on service type and entity status: exemptions apply only to construction/maintenance-related services for specified works including water supply and sewerage; sanitation and water-supply related manpower may be exempt, while other outsourced functions like security, computer operators, street-light and park services remain taxable. The narrowed statutory definition of "Government" affects whether a municipal corporation qualifies for such exemptions and must be examined.