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.

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.