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2022 (9) TMI 535 - Service Tax
Exemption from Service Tax - work contract services - construction of boundary wall, godown, shops, toilets, roads, sanitation, water reservoir, drinking water supply, sewage treatment plant etc - whether respondent contractor is covered under Clauses-12 and 13 of the Mega Exemption Notification no.12/2012-ST dated 20.06.2012? - HELD THAT:- The Krishi Utpadan Mandi Samiti, a body corporate created under Section 12 of U.P Krishi Utpadan Mandi Adhiniyam 1964 is covered in the definition of 'Government Authority' under Clause 2(s) of the Mega Exemption Notification - Clause-12 of the Mega Exemption Notification clearly provides that any service provided to the Government, a local authority or a government authority relating to construction work which is not for commercial or business purposes is exempted and such services be not taxable for the service tax.
The construction of markets in the Mandi area can not be termed as business activity. The renting/leasing of the shops, market sheds etc for consideration is another method of regulation of the Mandi area. By leasing/renting of market sheds, the activities of Samiti cannot be categorized as commercial/business activity.
In M/S BHARAT BHUSHAN GUPTA AND COMPANY VERSUS STATE OF HARYANA AND OTHERS [2016 (8) TMI 722 - PUNJAB AND HARYANA HIGH COURT] wherein contract was awarded for construction of flats for BPL category to the Board created under Haryana Housing Board Act, relying upon SHAPOORJI PALOONJI & COMPANY PVT. LTD. VERSUS COMMISSIONER, CUSTOMS CENTRAL EXCISE AND SERVICE TAX AND OTHERS [2016 (3) TMI 832 - PATNA HIGH COURT], it was held that the Board being a statutory Government Body, it shall be entitled to the benefit of exemption, as was provided to Shapoorji Paloonji and Company Pvt Ltd for construction for Indian Institute of Technology.
In light of the functions and duties of the Krishi Utpadan Mandi Samiti, it is evident that the "Work Contract Services" provided by the respondent contractor to Krishi Utpadan Mandi Samiti is exempted from levy of Service tax in view of the exemption notification no.12/2012-ST. - the arguments of the learned counsel for the appellant revenue about the activity of letting/renting of Krishi Utpadan Samiti being commercial has no basis.