TaxTMI 
TaxTMI 
2018 (4) TMI 1894
X X X X Extracts X X X X
X X X X Extracts X X X X
....to 30.06.2017. Tender conditions in all the above contracts includes (a) the rates specified in the schedule for the different items of works are for the finished works (b) the contractor's rates are inclusive of sales tax payable by the contractor to Government as per the Tamil Nadu General Sales Tax Act, 1939, as amended from time to time. No enhanced rate would be paid to the contractor, for any upward revision of sales tax, during the currency of the contract. 2. Appellant has contended that he did not quote rates including service tax which was in vogue from 01.04.2015 to 30.06.2017. According to the appellant, works contract to Government, other than Commercial nature, was exempted by the Government of India, Ministry of Finance, New Delhi, 1st respondent in notification No.25 of 2012. But the exemption has been withdrawn with effect from 01.04.2015, and as per the subsequent notification dated 01.04.2015, all the contractors who execute public works under various departments of Government are liable to pay service tax. When service tax was liable to be paid by the subsequent notification from 01.04.2015, demand for Rs. 1.39 crore was made. 3. The appellant was issu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... exempts the following taxable services. 1 to 12..... "12A. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of -- (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art of cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause (44) of Section 65 B of the said Act; under a contract which had been entered into prior to the 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date: provided that nothing contained in this entry shall apply on or after the 1st April, 2020"; From the plain reading of the notification, it can be seen that the exemption is available on certain services viz., construction, erection, c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot eligible to claim exemption under the said notification. Accordingly, you are liable to pay the service tax dues along with interest and penalty. Para 4: Non-payment of Service tax - Rs. 40,905/- under Works Contract Service. On verification of your ST3 returns for the HYE September 2015 and March 2016, it is observed that you have constructed 20 houses (11-MIG-II & 9-MIGIII) at Pattinamkathan in Ramanathapuram District by entering into agreement with PWD vide agreement dt. 27.11.2015. But instead, of paying full service tax you have paid only 50% service tax on the contract receipt of Rs. 13,63,500/- under reverse charge mechanism treating TNHB as corporate entity. It is noticed you are not eligible to pay 50% of Service tax dues on the contract receipts since Tamil Nadu Housing Board is not a corporate body but it is a separate Board under State Government which was constituted under the Tamil Nadu State Housing Board Act, 1961 (Tamil Nadu Act 17 of 1961). In short, TNHB is a Government authority. Accordingly, you are liable to pay 100% Service tax on the contract receipts. A detailed worksheet for calculation of service tax liability is enc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed. 7. Having regard to the rival submissions of the parties, writ Court, vide order dated 20.03.2018 in WMP No.1486 of 2018 in W.P.No.1185 of 2018, declined to grant injunction sought for, as hereunder: "6. The learned counsel appearing for the petitioner submitted that as per Section 66(b) of the Service Tax Act, the exemption should be granted to the petitioner from paying the service tax. Further, the learned counsel submitted that the petitioner is making payment of the service tax to the respondents 2 & 3 and get the service tax paid to them and get it reimbursed from the State Government and that the State Government is taking their own time to reimburse the amount, which causes hardship to the petitioner. The learned counsel also submitted that the exemption was granted to the petitioner in the year 2012, therefore, the same arrangement should continue for the subsequent years also. 7. The learned counsel appearing for the respondents 1 to 3 submitted that as per the amended provisions, exemption is given only to Government from paying the service tax and private individuals are not entitled for any exemption. 8. The learned counsel appearing f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....liable ultimately for the same, but failed to appreciate that appellant obeyed the law and paid the service tax about Rs. 9.00 lakhs in the year 2015 itself which has not yet been reimbursed till this date and if the present demand of Rs. 1.39 crores has to be paid, the entire 1.00 crore capital would be wiped out and would be burdened with a loan of Rs. 40 lakhs, thereby would make the appellant penniless thereby forcing to default in pending works contracts with the State thereby causing grave injustice and irreparable loss which could never be compensated and therefore, writ Court has committed an error in dismissing the Misc. Petition in the impugned order and hence it is just and necessary for this Court (appellate Court), to protect the appellant from 3rd respondent, from demanding service tax. c. that the writ Court has failed to appreciate that Sec.66-B bars, as well as it is unconstitutional for, the 1st respondent from imposing service tax on the State Government for doing service to the public without any consideration and on the facts and circumstances of this case, it is the State Government who has engaged the Appellant-contractor to perform the service to pu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h is evident from page Nos. 102 to 108 of the typed set of papers, enclosed, Mr.N.Subramaniyan, learned counsel for the appellant submitted that service tax demanded for various works vide notice dated 30.01.2017 has been paid, but reimbursement has not been made by the State Government. Page Nos. 102 to 108 of the typed set of papers, evidencing payment of service tax to government, are reproduced. Indian Overseas Bank Payment of Indirect Tax - Cyber Receipt Name Nandhini Constructions Assessee Code AABFN3313QST001 Location Code 630402 Commissionerate Code 63 Division Code 04 Range Code 02 Major Head 0044-Service Tax Accounting Code Accounting Code Accounting Description Amount 00440410 Works Contract 291200 Name Nandhini Constructions Services 00441493 Swachh Bharat Cess 10400 Amount In Rupees Rs. 301600 Amount In Words Rupees Three Lakhs One Thousand Six Hundred Only BSR Code 0270626 Cheque Tender Date 06/02/2017 Challa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Of Payment E-Payment Indian Overseas Bank Payment of Indirect Tax - Cyber Receipt Name Nandhini Constructions Assessee Code AABFN3313QST001 Location Code 630402 Commissionerate Code 63 Division Code 04 Range Code 02 Major Head 0044-Service Tax Accounting Code Accounting Code Accounting Description Amount 00440410 Works Contract Services 349496 00441493 Swachh Bharat Cess 12482 Amount In Rupees Rs. 361978 Amount In Words Rupees Three Lakhs Sixty One Thousands Nine Hundred And Seventy Eight Only BSR CODE 0270626 Cheque Tender Date 21/02/2017 Challan No. 50058 Transaction Id 890539 Date Of Realization 21/02/2017 Mode Of Payment E-Payment Indian Overseas Bank Payment of Indirect Tax - Cyber Receipt Name Nandhini Constructions Assessee Code AABFN3313QST001 Location Code 630402 Commissionerate Code 63 Division Code 04 Range Code 02 Major Head 0044-Service Tax Accounting Code Accounting Code Accounting Description Amou....