SERVICE TAX

[sonu shah]

Dear Expert,

we have received order from our customer for metro rail works. my customer is sub contractor. as per him service tax is not applicable to me under notification 25/2012. my customer and principal service provider enter in to contract before 01.3.2016.

my query is my customer (sub contractor) is giving me order in after 01.03.2016. shall we eligible for getting exemption.

[Rajagopalan Ranganathan]

Sir,

According to Explanation of Sl. No. 14 (a) "the services by way of construction, erection, commissioning or installation of original works pertaining to monorail or metro, where contracts were entered into before 1st March, 2016, on which appropriate stamp duty, was paid, shall remain exempt."

In my opinion you please obtain in writing that the principal service provider entered into contract before 1St March 2016 and appropriate stamp duty had been paid by the principal contractor. You should obtain this letter from the principal contractor through your customer (sub-contractor) so that you can defend your action in future when you face the Departmental/CERA Audit.

[KASTURI SETHI]

Contract executed before 1.3.16. Hence entitled to exemption from ST vide Notification No.9/16-ST dated 1.3.16. (Serial No. 14 (a) with Explanation.This Notification amends Notification No.25/12-ST. You have received copy after 1.3.16, it does not matter.

[YAGAY andSUN]

Please provide us with the date of execution of the contract to revert you.

AI Summary

Exemption for metro construction services applies where original-works contracts predate the statutory cutoff and stamp duty was paid. Services of construction, erection, commissioning or installation of original works for monorail or metro are exempt where the principal contract was entered into before the statutory cutoff and appropriate stamp duty was paid; subcontractors should obtain written confirmation from the principal contractor proving the contract date and stamp-duty payment to substantiate the exemption in future audits.