Applicability of service tax

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Vinay B L (Querist)
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14 May 2012 Dear Members,

XYZ Infratech Private Limited is a Company which is engaged in taking railway contracts. Will the company come under the purview of Service Tax.

Kindly guide me.

Thanks & Regards
Vinay B L

CA Piyush Chandanmal Rakhecha

CA Piyush Chandanmal Rakhecha (Expert)
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14 May 2012 Yes, As per new Cicular except negative list all other services liable for ST.

And taking railway contracts is not in negative list

Vinay B L

Vinay B L (Querist)
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15 May 2012 Dear Sir,

Thank you for your reply. The brief facts of the case is as follows:

Mr. X and Y are sole Proprietors engaged in taking railway contracts (Laying railway lines etc) and they incorporated a private company namely XYZ infratech Private Limited for taking over their existing business by the said Private Limited.

I suggested them that since the Company undertakes works contract, Company need to have service tax registration. But they told that they are in to this business from many years till today they have not paid any service tax and the Government has also not raised any objection and they have exemption for the same.

Then I referred the Finance Act, 1944. Section 65(105)(ZZZZA)Specifically excludes contracts in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams from the purview of works contact.

Therefore I request you to Share the circular which speaks about the negative list.

Thanks & Regards
Vinay B L

CA Piyush Chandanmal Rakhecha

CA Piyush Chandanmal Rakhecha (Expert)
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18 May 2012 Dear Vinay,

XYZ Infratech Pvt. Ltd. company is providing work contract services i.e. Laying railway lines etc. to the govt. organisation.

Therefore it is comes under Construction and Real Estate sector which is comes under negative list.

and therefore specifically exempted from levy of service tax.

On the brife fact my previous opinion is change as above.

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