Tax on supply of water & mines safety

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 November 2014 Respected Sir,
I want to know that I am business man engaged in Work Contract, and I have done huge work Rs. 40 Lakhs for Eastern Coalfields Limited and I have not charged any service tax on the job of Water Supply from ECL and the fund was for welfare fund which ECL grants for development of Panchayat Area, My question is whether the "Supply of Water" & "Mines Safety Job" are exempt from Service Tax or Not. As such the Work Order and Payment for the Water Supply was paid by ECL.
Please do reply.
Thank you.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 November 2014 Water supply to Panchayat area being the service to local authority may be exempted from service tax but service tax is payable on Mines safety job.

Querist : Anonymous

Querist : Anonymous (Querist)

16 November 2014 Respected Seetharaman Sir,
The fact of the issue is that the Tender for Water Supply is made by Eastern Coalfields Limited and the payment was made by Eastern Caolfields limited, in this sense the actual receiver of service is Eastern Coalfields Limited but the actual work is done for the welfare of the Local Authority and for development of local area which ECL is bound to develop from there welfare fund.
1) Is the provider is bound to take service tax or not?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 November 2014 Only the fund is provided by ECL but the service is received by local authority for development of local area. Service receiver is not ECL hence service tax shall not be payable.

Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2014 Respected Seetharaman Sir,
Then to prove that the work was done for the development of Panchayat Area and only the fund was provided by the Eastern Coalfields Limited, What are the materials required to prove that the Job was not in the purview of Service Tax and no evasion of Tax has been done in this case.
Thanking You.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 November 2014 Notification No. 25/2012-Service Tax.

25. Services provided to Government, a local authority or a governmental authority by way of -
(a) carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement and upgradation;

Please see the above notification. If you get a letter from panchayath that the services are provided on their behalf service tax will not be attracted.

Querist : Anonymous

Querist : Anonymous (Querist)

19 November 2014 Respected Sir,
If the Panchayat did not give any Letter and instead of Panchayat The Eastern coalfields ltd gives the declaration that the fund / word order or tender was given to the Contractor for development of Panchayat Area, in the case Did the declaration made by the Eastern Coalfields limited will help that the final service receiver is Panchayat which is exempted from Service Tax.
As well do you have any case references similar to this in, in this regards which will help me to prove my point.
Thanking You.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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20 November 2014 If you get a letter from panchayat it will serve the purpose. I don't have any case reference.

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