Indivisible composite works contracts are not chargeable to Service tax prior to June 2007

Last updated: 24 August 2022

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The Supreme Court has ruled that service tax cannot be levied on indivisible composite works contracts entered into before the Finance Act 2007 was introduced. The court upheld its previous decision in the Larsen and Toubro Ltd case, stating that the law clearly distinguishes between contracts for goods and contracts for services. Reconsidering this established precedent was deemed inappropriate, especially as the revenue department had not challenged the earlier ruling.

Court :
Supreme Court of India

Brief :
The Hon'ble Supreme Court of India in the matter of M/s. Total Environment Building Systems Pvt. Ltd. v. The Deputy Commissioner of Commercial Taxes & Ors.[CIVIL APPEAL NOS. 8673-8684 OF 2013 dated August 02,2022] upheld the decision of the Commissioner, Central Excise and Customs, Kerala vs. Larsen and Toubro Limited, (2016) 1 SCC 170 ("the Larsen and Toubro Ltd") need not to be reviewed and stated that no service tax to be levied on Composite Works Contracts prior to the introduction of the Finance Act, 2007 ("the Finance Act").

Citation :
CIVIL APPEAL NOS. 8673-8684 OF 2013 dated August 02,2022

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