Works Contract Service Provided to Project Implementation Unit

[Rushi Upadhyay]

Dear All,

If any one would help me with case laws available for exemption to Construction of New CHC Building and Government Medical Store in erstwhile Service Tax Act it would be a great help.

[KASTURI SETHI]

Pl. elaborate your query along with period involved. The definition of 'Government . was amended.

[Rushi Upadhyay]

During the year 2010-11 and 2011-12 work alloted to construct New CHC Building with P.M Room, Guarrage and Compound Wall, Construction of Dindayal Upadhyay Govt Medical Store. Work Completed and finally amount received during the year 2015-16 and 2016-17. At the relevant period of time One Line is mentioned in the contract that Contract amount is including Service Tax but at the relevant period of time it was under dispute that the said work is exempted or taxable and therefore no Service tax has been discharged. Now party has received the SCN for payment of Service Tax based on the Third party data i.e. Income Tax Recoreds. At the relevant period of time work is being managed and awarded by the project Implementation Unit.

[KASTURI SETHI]

SCNs based on the third party data i.e. Income Tax Department etc. are issued without complete investigation. It is not necessary that the department is always right. One case law is in your favour. Go through the following case law :-

CESTAT Chandigarh has held as under :-

"Demand cannot be confirmed on the basis of Form 26 AS Vs. ST-3 returns without proper basis. Demand set aside. " Party : Raj Mohan Yamunanagar Vs. Commissioner, Panchkula. 2022 (8) TMI 832 - CESTAT CHANDIGARH . Search on google or TMI.

[Amit Agrawal]

There are many factual aspects to be considered along-with changes in exemption available under service tax over period of time. For example: Serial No. 12 & 12A of Notification No. 25/2012-Service Tax.

Also, legal position prior to 30.06.2012 and thereafter needs to be looked into. And there are retrospective amendments / exemption in some case. for example: Section 102 of the Finance Act, 1994 (32 of 1994) as amended from time to time.

Besides, one must also look for possible Defenses in line with & around, what is explained by Shri Kasturi Sethi Ji in above post.

Considering limited facts available here with no documents to go through and there are multiple legal possibilities to be considered while defending the subject case, I would suggest to get help from an expert for defending your case.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[Padmanathan KV]

Agree with the above views of the experts. Pls check whether the SCN is barred by limitation also.

AI Summary

Service tax exemption for government construction projects may defeat SCNs issued from third party tax records. Whether service tax is payable on construction of CHC and a government medical store when contracts awarded during 2010-12 were completed earlier but payments received later and no service tax was discharged; Revenue issued SCNs based on third party tax records. Defenses include challenging demands founded solely on third party records and assessing applicable exemption notifications, legislative changes across the relevant periods, retrospective amendments, and limitation bars.