TaxTMI 
TaxTMI 
2018 (7) TMI 1941
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....false ceiling, wall panelling, column cladding, sanitary and plumbing work for value addition or for aesthetic reasons. The Appellant undertakes the interior contracting work on the basis of specific job/work orders awarded by its clients. Since all such contracts are in the nature of works contract within the meaning of Section 2(57) of the West Bengal VAT Act, the Appellant is duly registered as a Works Contractor under the West Bengal Vat Laws and had been discharging its Vat liability on the full contract price under the composition scheme available to works contractor under the VAT Law prescribing a rate of 2%. 2. The Finance Bill 2007 proposed inclusion of a new category of taxable service i.e. "Works Contract Services" and the sam....
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....e Appellant was eventually served with a show Cause Notice dated 26 May 2008 demanding service tax on the activities of the Appellant for the period from 16 June 2005 to 31 March 2007 under the taxable categories "Commercial or Industrial Construction Services" (CICS) and "Erection, Commissioning or Installation Services" (''ECIS'). The demand proposed in the said Notice was confirmed by Order-inOriginal dated 29 June 2009. It was also contended that the Appellant had discharged VAT on gross receipts as works contract under the VAT laws which could not again be subject to service tax as the two levies are mutually exclusive. An appeal against the order of the Adjudicating Authority was also rejected by the Lower Appellate Authority on the f....
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.... and perused the appeal records. 7. We find that the Appellant in the instant case is engaged in the execution of an indivisible works contract involving supply of both goods and services. We also observe that the Appellant is duly registered as a works contractor under the VAT laws and discharged VAT on the gross receipts as evident from Quarterly Sales Tax Returns and the VAT Assessment Orders for the relevant period. The Circular dated 22 May 2007 issued by the Joint Secretary (TRU) clarifies as under: "Contracts which are treated as works contract for the purpose of levy of VAT/sales tax shall also be treated as works contract for the purpose of levy of service tax. This is clear from the definition under Section 65 (105) (z....
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....of both goods and services. The Appellant intended to seek registration as a works contract service provider only, as evident from the application for STC Code filed alongwith the application for registration on 30 May 2007 coupled with the fact that even after the grant of registration under CICS, the Appellant was discharging service tax at the rate of 2% under the works contract composition scheme for payment of tax rules. The circumstantial evidence is also clearly pointing to the fact that the intention was to take registration under the category works contract services as the application was mooted on 30 May 2007 just on the cusp of the introduction of Works Contract Services. Therefore, no negative inferences can be drawn from the fa....