repair of road

[RAM AVTAR]

whether repair of road,( contract awarded by governemnt ) is taxable before july 2009

[Sucheta Agrawal]

Dear Mr. Ram,

in case of Govindswamy Balraj v CCE dated 28.10.2010 held that - works contract' and construction activity being covered by Board's letter dated May 24, 2010 not raised before adjudicating authority – Matter remanded for de novo consideration by original authority.

and by Notification No. 54/2010-ST dated 21.12.2010 maintenance and repair of road exempt from tax.

 

[Vijay Chitte]

As per Para 16.2 of Circular No.B1/6/2005-TRU datd 27/07/2005, service relateing to maintance or management of immovable property (Such as roads, airports, railways, building,parks, electric intallations and the like) have been covered undre the preivew of service tax since 16/06/2005.  (All circlulars issued by CBE&C, except letter of TRU have been withdrawn vide CBE&C Circular No.96/7/2007-ST dated 23-08-2007. Thus TRU lettlers are still current)

Validity of these circluars in respect of maintenance and repairs of road and ariport is doubtful.

From 27-07-2009 maintenance of repaire of road  is exempted wide Notification No.24/2009-ST.

AI Summary

Service tax on road maintenance: initial TRU coverage was contested, later notifications exempted maintenance and repair from tax.
Contracts for repair and maintenance of roads were initially treated as taxable under TRU guidance covering maintenance of immovable property, a position whose validity was questioned; an adjudicatory remand occurred for de novo consideration because a Board letter was not raised. Later notifications exempted maintenance and repair of roads from service tax, altering the regulatory treatment and removing tax liability for such services under those notifications.