No Service tax can be levied on indivisible Works Contracts prior to June 1, 2007

Last updated: 24 August 2015

Court :
Supreme Court

Brief :
The Hon’ble Apex Court after elaborate discussion of the various provisions and judicial pronouncements held as under: I). A plain reading of the judgment in the case of Gannon Dunkerley and Company and Others Vs. State of Rajasthan and Others [2002-TIOL-103-SC-CT-CB], clearly and unmistakably holds that unless the splitting of an indivisible Works Contract is done taking into account the eight heads of deduction, the charge to tax that would be made would otherwise contain, apart from other things, the entire cost of establishment, other expenses, and profit earned by the contractor and would transgress into forbidden territory namely into portion of such cost, expenses and profit as would be attributable in the Works contract to the transfer of property in goods in such contract

Citation :
Commissioner of Central Excise and Customs, Kerala and Others Vs. Larsen and Toubro Ltd. and Others [2015-TIOL-187-SC-ST]