Service tax on work contract in 2011-12

Dear Members,

My Client have executed a Work Contract for a Trust (non Profit Organization) for construction of Hospital during 2011-12. During the same year he hase also executed other commercial construction thru WC.

Is Service Tax applicable on such WC which he has executed for NPO as during that period Service Tax definitions contained "building primarily used for commerce or industry".

 

Kindly clear.

 

Regards

Replies (1)

Dear Namit,

Such construction activity was exempted. you may refer Point no. 13.2 of circular no. 80/10/2004 dated 17-09-2004

Text is as under :

"13.2 The leviability of service tax would depend primarily upon whether the building or civil structure is ‘used, or to be used’ for commerce or industry. The information about this has to be gathered from the approved plan of the building or civil construction. Such constructions which are for the use of organizations or institutions being established solely for educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purposes of profit are not taxable, being non-commercial in nature. Generally, government buildings or civil constructions are used for residential, office purposes or for providing civic amenities. Thus, normally government constructions would not be taxable. However, if such constructions are for commercial purposes like local government bodies getting shops constructed for letting them out, such activity would be commercial and builders would be subjected to service tax."

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