Supreme Court: No Service Tax on Indivisible Turnkey ATM Contracts Prior to 1 June 2007

Last updated: 06 August 2026

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The Supreme Court has ruled that service tax cannot be levied on indivisible turnkey contracts for ATMs prior to 1 June 2007. The court found that the Finance Act at the time did not allow the tax authorities to artificially separate the installation and commissioning services from the overall contract. This decision upholds the principle that composite contracts are not subject to service tax unless specifically provided for, which only became possible with the introduction of 'Works Contract Service' in 2007.

Court :
SUPREME COURT OF INDIA

Brief :
The Supreme Court has held that indivisible turnkey contracts for the supply, installation, and commissioning of ATMs could not be subjected to service tax under the category of "Commissioning or Installation" prior to 1 June 2007, as the Finance Act, 1994 did not authorize the splitting of composite contracts for taxation.

Citation :
CIVIL APPEAL NOS. 4708-4711 OF 2008

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Attached File : 459474_6073_civil_appeal_nos_4708_4711_of_2008.pdf

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Judgement posted by

Mita Basak

Professional

I write informative articles on taxation, GST, TDS/TCS compliance, corporate laws, EPF, government schemes, and finance-related topics. My focus is on simplifying complex legal, tax, and compliance matters into practical and easy-to-understand guides for professionals, businesses, and general readers.

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