we are a contractor, and get a contract form a manufcuring company for Construction of residential complex( with materials) for his employees in factory campus.
now Client denied to pay Service tax on our works bill client says as per circular no 108/02/2009
service tax not applicable in our case
Please let us in such condition we are liable to pay service tax, or our serviceprovided is under exempted caregory?
Contractor's Service Tax Exemption Denied; Construction for Employees Not Considered a Sale Under Circular 108/02/2009. A contractor received a contract from a manufacturing company to construct a residential complex for its employees within the factory campus. The client refused to pay service tax, citing circular no 108/02/2009, claiming the service is exempt. A respondent clarified that according to the circular, service tax is not applicable when a residential complex is constructed and sold, as it is considered a sale. However, since the contractor provided a service, it is taxable, and the exemption does not apply in this situation. (AI Summary)
TaxTMI 
TaxTMI 
