construction of 'divider' between roads & 'traffic island'

[sunil mehta]

1)A service provider has got work from municipal corporation to supply anf fix  'road divider' in the middle of the road.

 

2)At the end of that road( at junction of four roads) he has to construct 'traffic island'.

 

3)He has also to supply and fix 'paver blocks' on one of the municipal owned existing road The whole work is inclusive of material and labour.

Query::-whether 'road divider' comes within the definition of road and thus exempted from stax on ' industrial or commercial  construction services ?

b)whether const. of 'traffic island' in the middle of junction of road is taxable under stax?

c)whether  supplying and fixing 'paver blocks ' on road side amounts to const. of road and thus exempted?

[Ramanujam Varadarajan]

The definition of 'works contract' covers 'construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry.  Thus, you can take a view that the works contract related to muncipal corporation/local bodies is not in relation towards commerce/indsutry and thus not covered within 'works contract' definition.

[Ramesh Patel]

The consturuction of road is totally exempt from service tax. further construction of traffic island is also exempt from excise due to construction at site.  And work done related to construction, repair or maintenance of road is exempt.  The mateiral used like paver block or divider is liable to excise duty if not manufactured at site.  All type of services provided for construction of road is exempt from service tax.  supplying and fixing of paver blocks on road side is amout to construction of road.

AI Summary

Construction of road exemptions may apply, while works contract definition and excise liability for materials remain contested. The taxability of constructing road dividers, traffic islands, and supply-and-fix of paver blocks depends on whether the work is classified as municipal road construction (exempt from service tax) or as a taxable works contract aimed at commerce or industry; materials supplied but not manufactured on site may attract excise duty.