service tax on supply of tangible goods

[vijay reddy]

is service tax leviable on 'supply of tangible goods to the contractor who is performing the works contract which is exempted under Mega Exemption Notification 25/2012-ST'?(its just like a sub contract for supply of tangible goods) if ST is not liable then please provide the case law.

[KASTURI SETHI]

No exemption was available to the service, namely, "Supply of Tangible Goods" in the situation explained by you. I think you are referring to Serial No.29(h) of Notification No.25/12-ST. Supply of tangible is out of definition of "Works Contract Service" - exemption is available to sub-contractors engaged in works contracts and not to other service. "Supply of Tangible Goods" does not fit into "Works Contract Service"

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Sethi.

[Ganeshan Kalyani]

Supply of tangible goods attract VAT.

AI Summary

Service Tax Applies to Supply of Tangible Goods, Not Exempt Under Mega Exemption Notification 25/2012-ST. A forum participant inquired about the applicability of service tax on the supply of tangible goods to a contractor performing an exempt works contract under Mega Exemption Notification 25/2012-ST. The consensus among respondents was that the supply of tangible goods does not qualify for exemption under this notification, as it is not considered a 'Works Contract Service.' One respondent noted that such transactions might instead attract VAT, further clarifying that exemptions apply to sub-contractors engaged in works contracts, not to the supply of tangible goods.