TaxTMI 
TaxTMI 
Reg.Liability of Service Tax on construction on Railway siding under COMMERCIAL OR INDUSTRIAL CONSTRUCTION SERVICES. The service tax provides exemption to "Railway" from the levy of services tax undser the chaper COMMERCIAL OR INDSTRIAL CONSTRUCTION SERVICES A number of large industrial units are constructesd Railway siding to facilitate movement of goods from the nearest Railway station to their Godown etc located in the factory. I would like to share the experience of my colleague, to inform me whether service tax on the above activity will be exempted and the reasoning thereof. P.K.GUPTA E-mail address: [email protected]/ office phone No.0120-2410378
Liability of Service Tax on construction on Railway
07 Sep 2009 
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Service tax exemption for railway-related construction depends on whether work is for or on behalf of the railway.
Whether construction of a railway siding attracts service tax under Commercial or Industrial Construction Services depends on (1) whether the engagement is a works contract or a pure labour contract and (2) whether the works are undertaken for or on behalf of the railway or are otherwise properly characterised as railway-related; works executed solely for an industrial unit's internal needs without being for or on behalf of the railway will not qualify for the railway-related exemption. (AI Summary)
Whether construction of a railway siding attracts service tax under Commercial or Industrial Construction Services depends on (1) whether the engagement is a works contract or a pure labour contract and (2) whether the works are undertaken for or on behalf of the railway or are otherwise properly characterised as railway-related; works executed solely for an industrial unit's internal needs without being for or on behalf of the railway will not qualify for the railway-related exemption. (AI Summary)