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2018 (9) TMI 758 - AT - Service TaxClassification Services - Business Support Services or not? - Negative list - services of Central Public Works Department (CPWD) in terms of an MOU dated 20th December, 2008 for construction of hostel blocks, Sports Complex, academic block, literature hall complex, canteen, hospital, staff residential quarters etc. in the premises of the appellant. Whether the appellant is a business entity? - N/N. 25/2012-S.T., dated 20 Jun., 2012 and N/N. 2/2014-S.T., dated 30 Jan., 2014 - Held that:- The perusal of both these Notifications shows that any authority, which is set up by an Act of Parliament or is established by a Government is a Governmental authority and any services provided to a Governmental authority by way of construction, errection, commissioning, installation, even repair, maintenance, renovation or alteration of any civil structure are exempted from the purview of taxable services. Whether the services as received by appellant from CPWD, a Govt. Department is a support service? - Held that:- For any services received to be called as support service, the important ingredient is that the support should have comprised of such functions that the recipient is able to carry out in ordinary course of operations themselves - In the present case, the appellant is carrying out the function of imparting education and the technical knowhow/consultancy but the service received from CPWD is that of construction of various civil structures. It becomes absolutely clear that the services received are not otherwise the activity of the appellant themselves. Outsourcing thereof will not bring the service received under the category of support service. Therefore, the adjudicating authority below has formed a wrong interpretation of the definition while holding the impugned services received as the support services. Whether the demand as confirmed is sustainable? - Held that:- Since impugned period is the post negative list period, section 67 D is relevant. This provision excludes the services provided by a Government or a local authority from the ambit of taxability. Apparently the service provider herein is a Govt. authority - The services are not taxable - Once the demand is not sustainable, question of accruing interest and of imposition of penalty does not at all arise. Appeal allowed - decided in favor of appellant.
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