Work contract service provided to police department
This query is : Resolved
28 March 2014
My client is a Cctv work contractor indulged in installation and commissioning of Cctv for city surveillance. This service is provided to police department. Order falls under category of work contract. I want to know whether he can avail mega exemption under n/n 25/2012 under point number 12, where,
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 -
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;
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 -
(a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession;
28 March 2014
no, as police dept is not govt authoirty nor local authority as its a independent judicial system's part.
28 March 2014
But police department is a government agency. Kindly light it more. Am not convinced.
03 August 2025
Great question! Let me clarify the applicability of the mega exemption (Notification No. 25/2012-ST) for work contract services provided to the Police Department, especially for CCTV installation.
Key Points:
Notification No. 25/2012-ST provides exemption for services provided to Government, local authority, or governmental authority relating to construction, erection, commissioning, installation, etc., of civil structures or original works mainly used for non-commercial purposes.
The notification's entry 12 covers services related to civil structures or original works, predominantly for use other than commerce, industry, or business.
The crucial part is to identify whether the Police Department qualifies as:
Government (central/state government),
Local Authority, or
Governmental Authority as per the definition under the Service Tax law.
Are Police Departments considered Government or Governmental Authority?
Police Department is a part of State Government functioning as a government agency.
Generally, services provided to the Police Department are considered services provided to a governmental authority, since police operate under state government jurisdiction.
However, the interpretation varies: Some authorities interpret police as government, others are stricter about "governmental authority" definition which is linked to autonomous bodies with defined legal status.
The exemption is usually allowed if the service is for non-commercial purposes and the contract is for original works or civil structures.
Does CCTV installation count as “civil structure or original works”?
The definition of work contract under service tax includes "installation".
CCTV installation & commissioning may qualify as "installation" and "commissioning" of original works, especially if it's part of a fixed installation integral to the building or infrastructure.
Courts have also recognized installation of such systems as part of original works in some rulings.
Practical approach:
Since Police Department is government, your client can argue for exemption under the notification, provided:
The service is for non-commercial government purposes (like city surveillance).
The service relates to civil structures or original works (installation & commissioning count).
If challenged, your client may need to furnish proof that services are purely for government use and not for any commercial activity.
If the contract or authorities treat the police as "government" for the purpose of exemption, the mega exemption can apply.
Summary:
Question Answer/Guidance
Is Police Department govt? Yes, it is part of state government
Is it “governmental authority”? Usually yes, but interpretation can vary
Does CCTV installation qualify? Likely yes, as installation of original works
Can mega exemption apply? Yes, if the purpose is non-commercial govt use
Key Points:
Notification No. 25/2012-ST provides exemption for services provided to Government, local authority, or governmental authority relating to construction, erection, commissioning, installation, etc., of civil structures or original works mainly used for non-commercial purposes.
The notification's entry 12 covers services related to civil structures or original works, predominantly for use other than commerce, industry, or business.
The crucial part is to identify whether the Police Department qualifies as:
Government (central/state government),
Local Authority, or
Governmental Authority as per the definition under the Service Tax law.
Are Police Departments considered Government or Governmental Authority?
Police Department is a part of State Government functioning as a government agency.
Generally, services provided to the Police Department are considered services provided to a governmental authority, since police operate under state government jurisdiction.
However, the interpretation varies: Some authorities interpret police as government, others are stricter about "governmental authority" definition which is linked to autonomous bodies with defined legal status.
The exemption is usually allowed if the service is for non-commercial purposes and the contract is for original works or civil structures.
Does CCTV installation count as “civil structure or original works”?
The definition of work contract under service tax includes "installation".
CCTV installation & commissioning may qualify as "installation" and "commissioning" of original works, especially if it's part of a fixed installation integral to the building or infrastructure.
Courts have also recognized installation of such systems as part of original works in some rulings.
Practical approach:
Since Police Department is government, your client can argue for exemption under the notification, provided:
The service is for non-commercial government purposes (like city surveillance).
The service relates to civil structures or original works (installation & commissioning count).
If challenged, your client may need to furnish proof that services are purely for government use and not for any commercial activity.
If the contract or authorities treat the police as "government" for the purpose of exemption, the mega exemption can apply.
Summary:
Question Answer/Guidance
Is Police Department govt? Yes, it is part of state government
Is it “governmental authority”? Usually yes, but interpretation can vary
Does CCTV installation qualify? Likely yes, as installation of original works
Can mega exemption apply? Yes, if the purpose is non-commercial govt use
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