Service tax on works contract

As per my view your company is eligible for exemption.  Please see sr. No. 12 of the said notification.

KPTCL cannot be said to be a government authority it is a pvt co. Therefore the exemption may notbe available.

Sir

Karnataka Power Transmission Corporation Ltd (KPTCL) is Public sector company, which is a company wholly owned by the Government of Karnataka.

As per Mega Exemption Notification 25/2012 , 'Govt Authority' means  1) a board, or an authority or any other body established with 90% or more participation by way of equity or control by Govt AND  2) set up by an act of the Parliment or  a state legislature to carry out any function entrusted to a municipality under article 243W of the Constitution

The entire equity of KPTCL owned by the Govt of Karnataka and set up by Karnataka Electricity Reforms Act was passed by the Karnataka Legislature to look transmission and distribution of electricity in the state.  In the Reforms act, KEB ceased to exist & KPTCL formed in the place of KEB.

As above stated, KPTCL is a government authority and works contract service provided to KPTCL is exemption from services tax  Notifiction 25/2012  sl.No.12

If any other openion always wellcome

Article 243W of the Constitution of India provides powers , authority to municpalites and not to corporations.

Therefore by no stretch of imagination can the KPTCL be called a government authroity as per the laid down law.

Therefore the exemption under not25/12 sr no. 12 is not available in my considered view.

Even though Article 243W of the constitution of India provides powers, authority to Municipalities; if any function listed in twelfth schedule of Article 243W carries out by a body, authority or a board with 90% or more participation by way of equity or control by Govt, is termed as Govt Authority.

 The functions listed in Twelfth schedules are illustrative and Article 243W gives powers to State Govt to endow some other functions which are not mentioned in 12th Schedule for public utility to Municipalities.

 Under Sl No.17 of twelfth schedule of Article 243W contains Public amenities including street lighting, parking lots, bus stops and public conveniences.

The word public amenity is broad and i.e benefit to the civil society and also covers water supply, supply of electricity, road, bridge etc. Under sl.No.17 of the 12th Schedule says "Public amenities including........

As per my view transmission or distribution of electricity by a body (body corporate), authority with 90% or more equity of Central/state govt and set up by an act of parliment or state legislature, is termed as Govt authority. 
 

Yes, I agree with you Mr. Prasanna, that KPTCL is not a government but it is a governmental authority as per the definition provided under Notification no.25/2012-St dated 20/06/2012.

Hence, Exemption shall be available.

we are a private limited company and we provide job work to companies, firm n individuals. at present we are deducting TDS on the payment made to them. and now my querry is that, here 1)who is liable to pay service tax and upto what extent?

2) and if service provider is liable whether it would matter that its a company, firm or individual

3) whether exemption of 10 lacs would be there?

As pe Notifictaion No.30/2012

1) If registered body corporate (here pvt co) receives works contract service from Individual, HUF, firm (whether registered or not) AOP then body corporate has liable to pay service tax on such works contract services. Here 50% of the service tax liable to pay by registered body corporate and remaining 50% of service tax liable to pay by Individual, HUF, firm (wheter registered or not) or AOP.

If pvt co, availed works contract service from another registered body corporate (pvt or public co), then entire (100%) service tax on such works contract shall be payable by service provider ie another registered body corporate.+

2) If service provider is                   service reciever is                        who is liable to pay

     Company                                    to Individual, HUF or AOP             100% of ST liable to pay by service

                                                                                                                      provider (ie Company)

  Individual, HUF or AOP                to Company                                     50% of ST liable to pay by service

                                                                                                                       provider and remaining 50% of ST

                                                                                                                       by service reciever

  Company                                         to Company                                   100% of ST by service provider

Individual, HUF or AOP          to Individual, HUF or AOP                      100% of ST by service provider

3) It is immaterial to service receiver (ie Body corporate)whether he has to claiming exemption limit of Rs.10 lakh for small service provider under notification No.33/2012. Even thought service receiver (ie body corporate) has claimed exemption under notifcation No.33/2012, service receiver liable to pay service tax on such works contract service received.

I assumed that job work charges including material portion and come under the purview of works contract definition.

If job work only relating to labour charges, then service provider liable to pay 25% of ST and service receiver (reg body corporate) liable to pay remaining 75% of ST

thank you sir,, yor reply helped me a lot,...

last thing..

the service provider actually provides services to our company for the value less than 10 lacs and they are neither registered under service tax.

so is this binding any liability on us (service receiver ) as body corporate?

If that services are covered under reverse charge machanism, then even though service provider is not registered under service tax, the service receiver (reg. body corporate ie. your company) liable to pay service tax on such services only to the extent that mentioned in the Notification No.30/2012.

In this situation service receiver should register under service tax for payment of service tax as service receiver even though the value of taxable services is less than Rs.10 lacs