Well Digging Service Tax

[george thomas]

Dear Sir

Our Company is given contract to one person for digging 4 well .Plz let me know service tax is applicable for the remuneration payable to contractor.

[DR.MARIAPPAN GOVINDARAJAN]

If his turnover is less than ₹ 10 lakhs then he is exempted from levy of service tax. Otherwise he is to raise service tax along with his bill.

[Ganeshan Kalyani]

The said service of digging of well is not exempted in service tax law and hence it is taxable after the revenue to the contractor crosses beyond the exemption limit.

[Mahir S]

Yes sir, the views posted above are legal and correct.

[KASTURI SETHI]

Digging well or construction of well and its repair, maintenance & renovation is covered under Mega Exemption Notification No.25/12-ST dated 20.6.2012 as amended vide Notification No.06/2015-ST dated 1.3.2015 effective from 1.4.2015 [at serial no.12 (d) Canal, Dam or other irrigation works]. Tube-wells, Tanks etc are also covered under , "Other irrigation works". Thus exemption from Service Tax is available only if this service is provided to Government, a local authority or a Govt. authority for the purpose of irrigation. Otherwise the activity of digging wells or construction of Wells, Tube-well etc. is liable to Service Tax.

 

AI Summary

Service tax liability: well-digging taxable unless turnover falls below exemption threshold or service is to eligible public irrigation authority. Service tax applies to contracted well-digging when the contractor's aggregate turnover exceeds the applicable exemption threshold; digging and related works are exempt under the mega exemption framework only when supplied to government or specified public authorities for irrigation purposes, otherwise the activity remains taxable.