Is service tax applicable to state govt psu

This query is : Resolved

Gopal Prasad (Querist)
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25 February 2015 Jharkhand police housing corporation is a state govt psu is not giving service tax on civil work done by the private contractor. The psu is envisaged with the construction of police residential quarters and police offices. Though the psu is not paying the service tax. Management stated that since they are working on behalf of home department. Hence they are not liable to pay. It was noticed that payment of service tax was not mentioned in the work order issued to the contractors. please suggest whether the psu is liable to pay the service tax. If yes kindly provide the details along with rules applied for calculation and act apply on it. If not the reason thereof. Please suggest me at the earliest....

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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25 February 2015 Service tax is not applicable.
EXEMPTED SERVICES VIDE NOTIFICATION NO 25/2012‐ST
(w.e.f. 01‐07‐2012)
Entry No. 12 - 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
(f) 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.

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