One of our client is in the business of on road under ground trenchless cable laying for telecom companies. Material is provided by the telecom company to the client and their job is to lay the cable under ground. They charge only labour charges which is pre-decided on per metre basis. Kindly clarify the applicability of service tax on this kind of service with respect to the latest amendments in this regard. Also please let us know of any abatement in this service.
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Applicability of Service Tax on Cable Laying
Replies (2)
93. SITE FORMATION AND CLEARANCE, EXCAVATION AND
EARTHMOVING AND DEMOLITION SERVICES
A. Date of introduction: 16.06.2005 vide Notification No.15/2005-ST
dt.07.06.2005.
B. Definition and scope of service:
“Site formation and clearance, excavation and earthmoving and
demolition” includes,-
(i) Drilling, boring and core extraction services for construction,
geophysical, geological or similar purposes; or
(ii) Soil stabilization; or
(iii) Horizontal drilling for the passage of cables or drain pipes; or
(iv) Land reclamation work; or
(v) Contaminated top soil stripping work; or
(vi) Demolition and wrecking of building, structure or road,
but does not include such services provided in relation to agriculture,
irrigation, watershed development and drilling, digging, repairing,
renovating or restoring of water sources or water bodies.
(Section 65(97 a) of Finance Act, 1994 as amended
You are liable to pay service tax under sub-clause 3 of the Category " SITE FORMATION AND CLEARANCE, EXCAVATION AND EARTHMOVING AND DEMOLITION SERVICES " No abatement has been granted to any person liable to pay service tax under the Section.Also refer a case law relating to Reliance Industries Ltd. in respect of valuation.
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