Service tax on Excavation of Public Road

[Amit Palsule]

Dear Sir,

What is the position of Services in respect of 'Site formation, Clearance and Excavation Services' post Service tax 2012?

Prior to 2012, Notification 17/2005 ST Dt. 07/06/2005, exempted such services in respect of road work. Post 2012, Mega Exemption Notification 25/2012, Clause 13 (a) exempts '

Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-

(a) a road, bridge, tunnel, or terminal for road transportation for use by general public;'

All the above work cannot be executed unless the excavation activity is done. Can we consider the services of excavation of public roads as exempted under the said category?

AI Summary

Excavation Services Not Exempt from Service Tax Under Mega Exemption Notification 25/2012 for Road Construction A query was raised regarding the exemption of service tax for 'Site formation, Clearance and Excavation Services' related to public road construction, referencing the Mega Exemption Notification 25/2012. The exemption applies to services like construction and maintenance of roads but does not explicitly cover excavation services. A response clarified that despite logical connections between excavation and road construction, they are classified as separate services with different codes under the Finance Act, 1994. Therefore, excavation services do not qualify for tax exemption based on road construction exemptions.