service tax
This query is : Resolved
08 January 2010
whether project under world bank done by up power corporation limited (a govt company ) done by an assessee under subcontract is exempt from service tax
11 January 2010
It is based on the criteria of the project
24 July 2025
Under the Service Tax regime (pre-GST), whether a project under World Bank, carried out by UP Power Corporation Ltd. (a government company) through a subcontractor, is exempt from service tax depends on the nature of the project and applicable notifications.
✅ Key Considerations:
World Bank Funding Alone Does Not Grant Exemption
Merely being funded by the World Bank does not automatically exempt a project from service tax.
The exemption depends on who the recipient is and what service is provided.
UP Power Corporation Ltd. is a Government Entity
It is not exempt just by being a government company.
Service tax may still apply unless the service is specifically exempt.
Subcontractor’s Position
If you are providing taxable services as a subcontractor to UPPCL, you are generally liable to pay service tax, unless:
The service itself is specifically exempted under a notification, or
The project qualifies under exemptions like Notification No. 25/2012-ST, later updated.
Check for Specific Exemptions
Services provided to governmental authorities in respect of:
Water supply, sanitation, electrification, or
Infrastructure projects in rural or backward areas
— may be exempt under Notification No. 25/2012-ST, Entry 12 or 13 (from 2012 onward).
If Prior to 2012
Prior to 01.07.2012, exemptions were project-specific (via individual exemption notifications or circulars), not general.
📌 Conclusion:
✅ Service tax is generally applicable on services provided by a subcontractor to UP Power Corporation Ltd., even if the project is World Bank funded, unless:
The service falls under a specific exemption notification, or
The project itself was notified for exemption by the Ministry of Finance.
📎 Suggested Action:
Review the nature of service provided.
Check if it qualifies under Notification No. 25/2012-ST (if post-2012).
For older cases, look for project-specific exemption notifications or consult with the department to confirm.
✅ Key Considerations:
World Bank Funding Alone Does Not Grant Exemption
Merely being funded by the World Bank does not automatically exempt a project from service tax.
The exemption depends on who the recipient is and what service is provided.
UP Power Corporation Ltd. is a Government Entity
It is not exempt just by being a government company.
Service tax may still apply unless the service is specifically exempt.
Subcontractor’s Position
If you are providing taxable services as a subcontractor to UPPCL, you are generally liable to pay service tax, unless:
The service itself is specifically exempted under a notification, or
The project qualifies under exemptions like Notification No. 25/2012-ST, later updated.
Check for Specific Exemptions
Services provided to governmental authorities in respect of:
Water supply, sanitation, electrification, or
Infrastructure projects in rural or backward areas
— may be exempt under Notification No. 25/2012-ST, Entry 12 or 13 (from 2012 onward).
If Prior to 2012
Prior to 01.07.2012, exemptions were project-specific (via individual exemption notifications or circulars), not general.
📌 Conclusion:
✅ Service tax is generally applicable on services provided by a subcontractor to UP Power Corporation Ltd., even if the project is World Bank funded, unless:
The service falls under a specific exemption notification, or
The project itself was notified for exemption by the Ministry of Finance.
📎 Suggested Action:
Review the nature of service provided.
Check if it qualifies under Notification No. 25/2012-ST (if post-2012).
For older cases, look for project-specific exemption notifications or consult with the department to confirm.
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