service tax applicable on work contact

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AAKASH NARESH SHAH (Querist)
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20 August 2016 Works contract carried out for Town Developmant Authority for laying of pipes for water supply & maintainence.Kindly inform about any Service Tax liability. Works Contract carried out for University of Agricultural Science / Horticulture University for Water Supply, laying of Pipes and maintainence. Kindly inform about any Service Tax liability.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 August 2016 Both the services are exempted from service tax vide NN 25/2012 ST.

AAKASH NARESH SHAH

AAKASH NARESH SHAH (Querist)
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22 August 2016 same service if rendered from 01-04-2011 to 30-06-2012. If liable under the definition of work contact

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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24 July 2025 Regarding your query on service tax applicability on works contracts for laying pipes and maintenance for Town Development Authority and Agricultural/Horticulture Universities:

Current position (as of 2016):
According to Notification No. 25/2012-ST dated 20-06-2012, works contract services provided to local authorities, government entities, and universities (like Town Development Authority, Agricultural/Horticulture Universities) are exempt from service tax.

Historical position (01-04-2011 to 30-06-2012):
The works contract service was liable to service tax during this period under the definition of works contract service (introduced in Finance Act, 2010 and effective from 01-04-2011).

There were no specific exemptions for works contracts to local authorities or universities before Notification 25/2012-ST.

So, service tax was applicable on works contracts carried out during 01-04-2011 to 30-06-2012 for such clients.

The rate applicable was generally 12.36% (including cess).

CENVAT credit was allowed subject to conditions.

Summary:
Period Service Tax Liability on Works Contract to Authorities/Universities
01-Apr-2011 to 30-Jun-2012 Yes, service tax applicable on works contract services
From 01-Jul-2012 onwards Exempt under Notification No. 25/2012-ST

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