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ST exemption on Infrastructure projects


I have the following query and would be grateful if any of your experts are able clarify.

I have been charging ST is 12.36% on soil investigation works that i do ( basically soil drilling, sampling and lab. testing). I was informed by one of my clients that any consultancy work or soil ivestigation work for an infrastructure project such as for Railways, Metro projects, National & State Highways is exempt from service tax. Is this true? Whether true or false I would very much appreciate if somebody substantiates their clarification. 

Thanks!

 
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Advocate- Taxation & Corporate

It is not true. Keep on charging and paying service tax.

 
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Government Servant -MOF

Infrastructure projects such as construction of road, dam, airports etc have been kept out of the purview of service tax only in respect of " Construction Service". However anciliary activities such preparation of DPR, Survey, Mapmaking, Soil Testing etc. in respect  to such project has not  been granted any exemption. Even maintenance of roads come under the purview of service tax (refer Circular  No 110/4/2009-ST ). So, consultancy, solil testing and such other allied activited would definitely be covered under different taxable category.

 

 
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Please ask your client to give you the basis on which he is claiming this(circular/ exemption Notification/ CBEC letter/ trade notice etc). Once he gives it please post it on this forum also stating under what category of taxable service you are registered under

 
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Advocate- Taxation & Corporate

Exemption notification are to be construed strictly- even if some infrastructure services are exempt, it does not mean all input services to that infrastructure service is exempt.

 
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