Home Case Index All Cases Service Tax Service Tax + HC Service Tax - 2013 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (6) TMI 588 - HC - Service TaxConstitutional validity of levy of service tax - construction and sale of flats - prospective buyers - Explanations to clauses (zzq) & (zzzh) and clause (zzzzu) of sub-Section 105 of Section 65 inserted by the Finance Act, 2010 - Held that:- it cannot be said that sale or intended sale of a completed building after grant of completion certificate by the Competent Authority stands on the same footing as that of a building, before, during or after construction but before grant of completion certificate. Hence, it cannot be said that equals are being treated unequally or that the classification does not rest on a valid basis. The 'Completion Certificate' is the differentia which keeps apart the constructions to which the Act does not apply. There is nothing discriminatory or arbitrary in excluding completed constructions, from the purview of service tax, for which no sum is received from the prospective buyer before grant of completion certificate. - The reason for exclusion appears to be that no element of service relating to the construction is involved after completion of the Construction. Regarding valuation - Held that:- The measure of tax is also not notional as contended; it is the gross value of construction charged by the service provider. Hence, the judgment of the Supreme Court in Rajasthan Chemist Association (2006 (7) TMI 17 - SUPREME COURT OF INDIA) is of no assistance to the petitioners. Any standard having a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the levy. Character of the levy being service tax on Construction, the gross value of construction clearly will have nexus with the element of service involved in the construction. It is stated that presently 75% of the gross value of Construction is exempted from service tax vide Notification dated 22.06.2010, issued by the Central Government in exercise of the power under Section 93(1) of the Finance Act, 1994. Be that as it may. As all the contentions fail, the writ petitions are liable to be dismissed - Decided against the assessee.
|