Taxability of Construction services and valuation

[ABHISHEK Kumar]

Dear Sir,

Our Client In FY 2016-17, had provided construction service to BIHAR STATE EDUCATIONAL INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED. The agreement was For “Construction of Senior Secondary Schools on Panchayat Level in Bihar”. BIHAR STATE EDUCATIONAL INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED is government company.

Total amount received is ₹ 21,18,643/-.

Department is giving 60% abetment and levies service tax on ₹ 8,47,457.

Our Query is:

1. Can we claim exemption under clause 12A (b) of Notification No. 25/2012-Service Tax. If no

2. Can we claim Small Service provider exemption, since taxable value of service portion is below ₹ 10 lacs.

AI Summary

Client Seeks Service Tax Exemption for School Construction Project Under Notification No. 25/2012 and Small Service Provider Rule A client provided construction services to a government company for building senior secondary schools in Bihar during FY 2016-17, receiving 21,18,643. The tax department applied a 60% abatement, levying service tax on 8,47,457. The client queries if they can claim exemptions under Notification No. 25/2012-Service Tax or as a Small Service Provider, given the taxable value is below 10 lakhs. Discussions highlight the need to verify if the company qualifies as a governmental authority under service tax law and whether the services align with functions under Article 243W of the Constitution. The final eligibility for exemptions depends on contract specifics and service nature.