https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=767584 https://www.taxtmi.com/caselaws?id=767584 Tax liability of the service provider providing Commercial and Industrial Construction Service to the public authorities - Period post 1st July, 2007 - applicability of section 66D, the negative list of services - HELD THAT:- The scope of the circular the definition, the exclusion clause of 65 (25 b) and that of mega-exemption notifications now stands clarified by Hon ble Supreme Court in the case of Krishi Upaj Mandi Samiti v. Commissioner of Central Excise and Service Tax [ 2022 (2) TMI 1113 - SUPREME COURT] Hon ble supreme court has dealt with the Circular No. 89/7/2006 as relied upon by the present appellant as well. It has been held that Paragraph 3 of the Circular, specifically clarifies that if such authority performs a service, which is not in the nature of a statutory activity and the same is undertaken for consideration, then in such cases, service tax would be leviable, if the activity undertaken falls within the ambit of a taxable service. Thus the circular exempts activities that are mandatory statutory obligations with fees deposited into the Government Treasury. Since the fees collected by APMCs were directed to the Market Committee Fund and not the Treasury, the exemption did not apply. The Court further noted that language used in circular of 2006 is clear and unambiguous. Applying the principles of interpretation of statutes, the Court observed that, It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. An exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the relevant policy and the exemption notifications issued in that regard - After carefully perusing the words used in S. 9, the Court stated that the activity cannot be said to be a mandatory statutory activity as contended by appellants since the fee collected is not deposited into the Government Treasury; it will go to the Market Committee Fund and will be used by the market committees. Thus such a fee collected cannot have the characteristics of the statutory levy/statutory fee. Thus, under the 1961 Act, it cannot be said to be a mandatory statutory obligation of the Market Committees to provide shop/land/platform on rent/lease. Conclusion - The functions of RIICO and RASMB are held to be discretionary functions for commercial purposes. Hence irrespective the roads or compound wall have been constructed for these local authorities, the appellant is liable to pay service tax while providing the said services. There is no exemption available to the appellant while providing such services to any private entity whose interest is nothing except commercial. There are no infirmity in the findings arrived at by the adjudicating authority below - appeal dismissed. Case-Laws Service Tax Thu, 20 Mar 2025 00:00:00 +0530