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.
Service Tax Applies to Works Contracts for Indian Navy; 50% Payable by Provider, 50% by Receiver per Notification 30/2012-ST. A client was contracted to replace a central AC plant and cooling appliances at INS Kalinga, Visakhapatnam, and believed the service was exempt from service tax. However, experts clarified that such works contracts are not exempt under the relevant service tax notifications. According to Notification No. 30/2012-ST, 50% of the service tax is payable by the service provider and the remaining by the service receiver. The consensus among the experts was that services provided to the Indian Navy are taxable, as they are not listed in the exemptions or negative list. (AI Summary)
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