Service Tax
TRT-2025-
Cesta Hyderabad
Date:-02-11-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 02 November 2023
Parties: The Managing Director, APMSIDC Vs Commissioner of Central Tax, Guntur
Facts –
- The Appellant, The Managing Director, APMSIDC, have received the services of Works Contract service (WCS) from one M/s Satya Sai Constructions.
- The department demanded service tax on the works contract and the Original authority confirmed the demand observing that the work order was given on 06.02.2016 and the exemption notification as amended was applicable only to contracts entered prior to 01.03.2015 and therefore, the said exemption was not available in respect of work order.
- The contention of the appellant is that they are working with an objective of no profit and no loss and they are not a business entity. Therefore, they are not liable to pay service tax as a service recipient under RCM in terms of Notification 30/2012-ST dated 20.06.2012.
Issue –
- Whether the appellant is liable to pay service tax on works contract?
Order –
- The Tribunal observed that the adjudicating authority, in his finding, has been able to establish that APMSIDC is a body corporate in terms of provision under the Act under which they were registered but he has not made any observation whether they are business entity also.
- Further Department has not been able to adduce, except to one example discussed supra, to support that APMSIDC is a business entity. It is also an admitted position that they are “Governmental authority”, though in terms of Notification No.25/2012-ST as well as in terms of relevant documents perused by the Adjudicating Authority.
- There is no other evidence on record to suggest that they are a business entity. Therefore, on this count itself, they would not be required to pay any service tax on reverse charge basis on the WCS provided to them by M/s Satya Sai Constructions and therefore, Notification No.30/2012-ST would not be applicable to them.
- Therefore, neither Original Order nor Impugned Order has been able to establish that they will be within the ambit of Notification No.30/2012-ST and therefore, liable to pay 50% of the service tax payable on the WCS provided by M/s Satya Sai Constructions to APMSIDC. Hence the appeal is allowed.
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