Applicability of service tax - work contract for laying out sewerage pipe line and water supply pipe

[DINESH MITTAL]

'A' dealing in work contract for laying out sewerage pipe line and water supply pipe lines for the local authority/M.C., whether the 'a' is covered under service tax or not.

[Dinesh Gupta]

You may refer to reply submitted by Mr. Rama Krishana to the issue id=1637 as, "Where the nature of activity is in the nature of works contract the same is falling withing the clause zzzza. But is such an activity is not for a commercial or industrial purpose the same is out of purview of service tax e.g. for municipal corporation or local development authority. On the other side if such an activity is part of residential complex, the same shall be subject to service tax."

Case under citation 2009 -TMI - 33551 - CESTAT CHENNAI can also be referred in this case.

AI Summary

Service tax applicability on works contracts: public infrastructure for local authorities is outside tax, but residential complex contracts are taxable.
Service tax applies to works contracts but where the activity is performed for non commercial public purposes for local authorities or municipal corporations it falls outside the purview of service tax; works contracts for residential complexes or private/commercial purposes are taxable.