Service tax on Road work-reg

[N Balachandran]

Sir,

I would like to have the clarification regarding the service liability on Road works.  As per the service tax provisions, the Formation of road is out of service tax net. in case of  work carried for widening the existing road by exacavation, levelling and filling with  available Red gravels on the road side without Tar & Metal, will it attract attract Service tax? The Road may be used only for Transport purposes which may not be the permanent Road for public uses as widening areas are belongs to private party.

Regards

N.Balachandran 

[YAGAY and SUN]

Repair and maintenance of road do attract the service tax.

[Balasubramanian Natarajan]

Deare

If it si teated as construction or improvement it is an excuded service . Even it is held to be management, maintenace or repair service the same is exempt vide Notification 34/2009-St dated 27.07.2009 effective from that date

balasubramanian n

Trichy

[sv bhasker]

I agree with Mr B.Natarajan. The repair of road, is exempt from payment of service tax vide Notfn No.24/2009-ST 

[Dilip Darji]

Dear Sirs.

The exemption appears to be okay, but normally the roads and bridges etc. are constructed by Govt. and it's maint. had become exempted. In the instant case, it appears that the work is done by the private parties and the persons providing the services of maintaining of road, would be liable to Service Tax. Though it is mentioned in the Noti.No.24/2009-ST that "provided to any person by any other person" does not reflect only Govt. bodies but the implied meaning is that the exemption is not available to the private parties.

Let other export also comment on this issue. 

[Balasubramanian Natarajan]

Dear

As the words emploiyed are persons we need not resteict the aqpplicability only to Government. As you may be aware that there is no preferential treatment to Government under Service Tax. CBEC when it wants, may exempt activities of public intertest or soverign functions through notification.One example is that collection of government duties and taxes by banks  are specifically exempt from 10.06.2004 through anotificationunder BAS

balasubramanin n

Trichy

[Vijay kumar]

Dear Sir, as per the nature of work involved, it is formation of a new road, albeit a kutcha one and is not an exclusively private road. Under the definition of Works Contract Service, construction of roads is exempted from Service Tax since it is part of infrastructure. Only when old and worn out roads are repaired, service tax is attracted under the Maintenance and Repair Service as per CBEC Circular dt.23.2.2009. Hence in the given situation, there is no service tax liability.

[Mahir S]

I agree with the comments posted by Mr. Kumar that it shall not attract any service tax.

Also, it appears that mostly Labour Job is being carried out.

AI Summary

Service tax on road works: classification as construction excludes tax, while repair/maintenance classification attracts tax.
Whether service tax applies to widening of a road depends on classification: if the activity is formation or construction of a new or improved road it is excluded under the works contract/construction exemption; if characterised as repair or maintenance it attracts service tax under maintenance and repair service, though exemption notifications and their scope (including whether they extend to services provided to private persons) are debated.