Service Tax on labour contract for construction services

[NANDKUMAR SAGWEKAR]

Dear All Learned Members

Education institute registered as a charitable trust had undertaken construction of education complex consisting of office , guest house, gaints and ladies hostel, class room , laboratory rooms etc . The said trust is providing all materials like cement , steel, sand ,colour and contractor has to construct the building with materials. The per square feet rates are decided by trust and contractor mutually as per each type of work like plinth, slabs , walls etc.

In this case whether contractor is liable to pay the service contract before and after 30-June-2012 , or he is exempt from service tax upto 30-June-2012.

Views of members are invited.

 

Thanks

 

A M SHEMBEKAR

 

AI Summary

Service tax on construction services applies to non-government educational projects; only government projects remain exempt.
Prior to the revised regime, only commercial construction was taxable and construction for educational or charitable institutions established solely for non profit purposes was not subject to service tax. Under the post reform negative list framework, construction of educational institutes for non governmental entities is not covered by the negative list or available exemptions, so such construction attracts service tax; the exemption for educational construction applies only when undertaken for government or specified governmental authorities.