Services rendered to INS Kalinga, Visakhapatnam whether exempted under service tax or not

[Mr Rao]

Dear sir,

One of my clients is awarded a contract for undertaking work of Replacement of BER Central AC plant and cooling appliances (i.e., providing all material and labour for the said work) at Indian Navy Station Kalinga, Visakhapatnam from February, 2017 onwards and is under the impression that the same is exempted from Service Tax. But I am of the view that exemption is not avilable to such works under the provisions of Service Tax. Requesting experts to guide me on this subject.

[Himansu Sekhar]

Service tax on works contract will be applicable if the contract is after 01.03.2015

[Rajagopalan Ranganathan]

Sir,

Notification No. 25/2012-ST dated 20.6.2012 a amended exempts services enumerated therein. Services provide to Indian navy is not exempted under this Notification. Since the nature of service provided is works contract service, as per Sl. No. 9 of Notification No. 30/2012-ST dated 20.6.2012 as amended 50% of service tax payable is to be paid by the provider of the service and the remaining 50% of service tax payable is to be paid by the receiver of the service.

[KASTURI SETHI]

No exemption of WCS provided to Govt. if contract has been executed on or after 1.3.15. I support the views of both experts.

[Himansu Sekhar]

Thank you sir

[Ganeshan Kalyani]

Neither in mega exemption notification no. 25/2012-ST or in negative list of services, the service provided to navy is mentioned which means the service is taxable. Thanks.

[Mr Rao]

Dear experts,

Thank u very much for all the experts for clarifying the doubt. Very grateful to u all sir.

AI Summary

Works contract service taxability for naval maintenance; tax liability shared between provider and recipient under notification framework.
Services replacing a BER Central AC plant and related cooling appliances at a naval station, performed as a works contract supplying materials and labour, are not exempt under the mega exemption notification or negative list and are taxable as works contract service. For contracts on or after March 1, 2015, no exemption applies and tax liability is apportioned between the service provider and the service recipient under the governing notification framework.