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2016 (6) TMI 192 - DELHI HIGH COURT

2016 (6) TMI 192 - DELHI HIGH COURT - 2016 (43) S.T.R. 3 (Del.) , [2016] 92 VST 330 (Del) - Legislative competence for Levy of service tax on preferential location charges while Purchasing a FLAT in the multi-storey group housing project - composite contract for purchase of immovable property - whether the explanation to Section 65(105)(zzzh) of the Act introduced by virtue of Finance Act 2010 as being ultra vires of the Constitution of India. - Prior to the amendment brought about by Finance Ac .....

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elation to a transaction between a developer of a complex and a prospective buyer impinges on the legislative field reserved for the States under Entry-49 of List-II of the Seventh Schedule to the Constitution of India. - While the legislative competence of the Parliament to tax the element of service involved cannot be disputed but the levy itself would fail, if it does not provide for a mechanism to ascertain the value of the services component which is the subject of the levy. Clearly ser .....

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charged to service tax. - Insofar as the challenge to the levy of service tax on taxable services as defined under Section 65(105)(zzzzu) is concerned, we do not find any merit in the contention that there is no element of service involved in the preferential location charges levied by a builder. We are unable to accept that such charges relate solely to the location of land. Thus, preferential location charges are charged by the builder based on the preferences of its customers. They are in .....

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er from certain additional attributes of the property developed. Such charges cannot be traced directly to the value of any goods or value of land but are as a result of the development of the complex as a whole and the position of a particular unit in the context of the complex. - Challenge to insertion of clause (zzzzu) in Sub-section 105 of Section 65 of the Act negated - Decided against the assessee. - However no service tax under section 66 of the Act read with Section 65(105)(zzzh) .....

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le service as defined in Section 65(105)(zzzh) of the Act and has deposited the same with the respondent authorities. Any such amount deposited shall be refunded to the Petitioners with interest at the rate of 6% from the date of deposit till the date of refund. - Decided in favor of assessee. - W.P.(C) 2235/2011 & W.P.(C) 2971/2011 - Dated:- 3-6-2016 - S. MURALIDHAR & VIBHU BAKHRU JJ. Petitioners: Mr Puneet Agrawal and Mr Sahil Kahol, Advocates. Respondents: Mr Vivek .....

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thi Group - Max Royal" being developed by the builder in Sector 76, Noida, Uttar Pradesh. 2. The builder has in addition to the consideration for the flats also recovered service tax from the Petitioners, which is payable by him for services in relation to construction of complex and on preferential location charges. 3. The Petitioners are aggrieved by the levy of service tax on services 'in relation to construction of complex' as defined under Section 65 (105) .....

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e contract for purchase of immovable property and contend that in absence of specific provisions for ascertaining the service component of the said agreement, the levy would be beyond the legislative competence of the Parliament. 4. The controversy involved in these petition relates to the question whether the consideration paid by flat buyers to a builder/promoter/developer for acquiring a flat in a complex, which under construction/development, could be subjected to levy of service .....

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neet Aggarwal, the learned counsel appearing for the Petitioners contended that the entries relating to taxation in List I and List II of the Seventh Schedule to the Constitution of India were mutually exclusive and the Parliament did not have the power to levy tax on immovable property; thus, the levy of service tax on agreements for purchase of flats was beyond the legislative competence of the Parliament. 6. He referred to the decision from the Supreme Court in Larsen & Toubro .....

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rvice component after excluding the value of goods as well as the value of land from such contracts. He submitted that since neither the Act nor the rules made thereunder provide any machinery provisions for ascertaining the service component of such composite contracts, the levy of service tax must fail. Mr Agrawal relied on the recent decision of the Supreme Court in Commissioner Central Excise and Customs, Kerala and Ors. v. Larsen & Toubro Ltd. and Ors.: (2016) 1 SCC 170 in support of hi .....

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x on service contracts simplicitor and their application to composite contracts would render the said provisions unconstitutional. 7. Next, Mr Agrawal referred to the decision of this Court in G.D. Builders. v. Union of India and Anr.: (2013) SCC OnLine Del 4543 and pointed out that this Court had examined the challenge to levy of service tax on composite contracts, including in the context of Section 65(105)(zzzh) of the Act, and had upheld the levy even in absence of any rule for as .....

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ax. He contended that since, in the present case, the provisions to ascertain the service element were insufficient, the levy of service tax must fail. 8. Mr Agrawal further contended that there was no service element in preferential location charges which were levied by a builder and the same related only to the location of the immovable property and, therefore, such charges were not exigible to service tax. 9. Next, Mr Agrawal contended that with effect from 1st July, 20 .....

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ntroduced with effect from 1st July, 2012. 10. Lastly, Mr Agrawal contended that for levy of service tax, it is necessary that there should be a service provider and service recipient. Therefore, only the services rendered after execution of the flat buyer's agreement could be subjected to tax as prior to the said date, in absence of the service recipient, the service in relation to construction of a complex, if any, is rendered by the builder to itself and cannot be su .....

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uary, 2012 in W.P.(C) 1456/2010 (Maharashtra Chamber of Housing Industry and Anr. v. Unoin of India and Ors) wherein the challenge to the explanation to Section 65(105)(zzzh) and Section 65(105)(zzzzu) introduced by virtue of the Finance Act, 2010 was rejected. On the strength of the aforesaid decisions, she contended that the concerned legislative amendment introduced by the Finance Act, 2010, namely, insertion of explanation to Section 65(105)(zzzh) and clause (zzzzu), were valid and enforceab .....

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rom the ultimate consumer is subjected to levy of service tax. However in case of preferential location charges, the entire amount charged by a developer is for value addition and, therefore, the gross amount charged for such services is chargeable to service tax under Section 66 read with Section 65(105)(zzzzu) of the Act. Discussion and Conclusion 12. Service tax was introduced for the first time in India in 1994 by virtue of the Finance Act, 1994. In his Budget speech, .....

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At the material time none of the specific entries under any of the Lists of the Seventh Schedule to the Constitution of India contemplated the levy of service tax; thus, the levy of service tax could be related only to the residuary entry in the Union List-Entry 97 of the List-I of the Seventh Schedule. Subsequently, the Constitution (88th Amendment) Bill, 2003 was introduced pursuant to which the Constitution was amended by, inter alia, insertion of Article 268A as well as Entry 92C in List-I .....

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within the scope of the levy of service tax by expanding the definition of "taxable services" under Section 65(105) of the Act. The Finance Act, 2012 brought about a paradigm shift in the service tax regime; with effect from 1st July, 2012, Section 65(105) of the Act was deleted and all services as defined under Section 65B (44) except as specified under Section 66D of the Finance Act, 2012 (negative list) were chargeable to service tax. 14. In the present petition we are co .....

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ided or to be provided:- xxxx xxxx xxxx xxxx xxxx (zzzh) to any person, by any other person, in relation to construction of complex" 15. The term "construction of complex" was defined under Section 65(30a) of the Act as under: "(30a) 'construction of complex' means- (a) construction of a new residential complex or a part thereof,· or (b) completion and finishing services in relation to residentia .....

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p> "(91a) "residential complex" means any complex comprising of- (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does no .....

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ot;residential unit" means a single house or a single apartment intended for use as a place of residence;" 17. The Petitioners have referred to various circulars issued by the Central Board of Excise and Customs (CBEC) which, according to the Petitioner, clarified that the taxable service under clause (zzzh) did not cover builders who were developing and selling immovable property. In this context, Circular No.108/02/2009 - ST dated 29th January, 2009 is relevant. The releva .....

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/developers). It is only after the completion of the construction and full payment of the agreed sum that a sale deed is executed and only then the ownership of the property gets transferred to the ultimate owner. Therefore, any service provided by such seller in connection with the construction of residential complex till the execution of such sale deed would be in the nature of 'self-service' and consequently would not attract service tax. Further, if the ultimate owner enters into a c .....

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tor, designer or a similar service provider are received, then such a person would be liable to pay service tax." 18. The counter affidavit filed on behalf of the Respondents also affirms the above Circular as clarifying that service tax was not applicable in respect of construction/development by a developer/builder engaged in the business of developing real estate for selling units to prospective buyers. It is affirmed on behalf of the Respondents that the "Circular was is .....

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dential projects and selling residential units in those projects to prospective buyers. Thus, unless the builder was rendering the service of construction of a complex simplicitor, no service tax was chargeable for service covered under clause (zzzh) of Section 65(105) of the Act. 19. It is relevant to note that at the material time, Section 67 of the Act which provided for the valuation of taxable services for charging service tax, read as under:- "67 - Valuation of t .....

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ion or brokerage by the stock-broker to any sub-broker; (b) the adjustments made by the telegraph authority from any deposits made by the subscriber at the time of application for telephone connection or pager or facsimile or telegraph or telex or for leased circuit; (c) the amount of premium charged by the insurer form the policy holder; (d) the commission received by the air travel agent from the airline; (e) the commission, fee or any other sum rece .....

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posit made by the subscriber at the time of application for telephone connection or pager or facsimile (FAX) or telegraph or telex or for leased circuit; ii. the cost of unexposed photography film, unrecorded magnetic tape or such other storage devices, if any, sold to the client during the course of providing the service; iii. the cost of parts or accessories, or consumables such as lubricants and coolants, if any, sold to the customer during the course of service or repai .....

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ourse of providing erection, commissioning or installation service; and viii. interest on loans. Explanation. 2. - Where the gross amount charged by a service provider is inclusive of service tax payable, the value of taxable service shall be such amount as with the addition of tax payable, is equal to the gross amount charged. Explanation. 3. - For the removal of doubts, it is hereby declared that the gross amount charged for the taxable service shall include an .....

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ny other person, in relation to construction of complex" [Explanation:. For the purposes of this sub-clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorised by the builder before the grant of completion certificate by the authority competent t .....

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xxx xxxx xxxx (zzzzu) to a buyer, by a builder of a residential complex, or a commercial complex, or any other person authorised by such builder, for providing preferential location or development of such complex but does not include services covered under subclauses (zzg), (zzq), (zzzh) and in relation to parking place. Explanation.-For the purposes of this sub-clause, "preferential location" means any location having extra advantage which attracts extra payment .....

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on 65(105)(zzzh) of the Act. In the present petitions, it is not the case of the Respondents that builders/promoters/developers who develop residential complexes - such as the group housing project developed by the builder in this case - and sell dwelling units in the complexes to prospective users render taxable service under Section 65(105)(zzzza) of the Act, that is, services in relation to a works contract. 23. Although such composite contracts for development of complex and sale .....

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s outside the scope of the present petitions and it would not be appropriate for us to examine it in these petitions [see Hindustan Polymers Co. Ltd. and Others v. Collector of Central Excise, Guntur: (1997) 11 SCC 302]. 24. Insofar as the impugned explanation is concerned, it is apparent that the same expands the scope of the taxable service as envisaged in clause (zzzh) of the Act. By a legal fiction, construction of a complex which is intended for sale by a builder or any person au .....

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tes an outright sale of immovable property, which admittedly is not chargeable to service tax. 25. In cases where construction is carried on by a builder on behalf of or for another person it can hardly be disputed that the builder renders a host of services which are involved in construction. As submitted by the learned counsel for the Respondents, such services would normally include services in the nature of architectural services, engineering services, services in relation to dev .....

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ses only in cases where the builder does not carry on the development activities on behalf of the purchaser but on his own but with an intention to sell the developed units; he enters into agreements with prospective buyers to sell fully developed units as and when such buyers are found. He may do so before commencing any construction/ development activity or during the course of developing the complex. 26. Service tax is essentially a tax on the value created by services as distinct .....

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in the construction of a complex and the resultant value created by such activities. 27. It is a usual practice for builders/developers to sell their project at its launch. Builders accept bookings from prospective buyers and in many cases provide multiple options for making payment for the purchase of the constructed unit. In some cases, prospective buyers make the payment upfront while in other cases, the buyers may opt for construction linked payment plans, where the agreed conside .....

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ut for the legal fiction introduced by the impugned explanation, such value add would be outside the scope of services because sensu stricto no services, as commonly understood, are rendered in a contract to sell immovable property. 28. The impugned explanation was enacted to principally bring about parity in various forms of arrangements entered into between the builders and prospective buyers for the purposes of levy of service tax. The object was to obliterate - for the purposes of .....

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8.1 The service tax on construction of commercial or industrial construction services was introduced in 2004 and that on construction of complex was introduced in 2005. 8.2. As regards payment made by the prospective buyers/ flat owners, in few cases the entire consideration is paid after the residential complex has been fully developed. This is in the nature of outright sale of the immovable property and admittedly no Service tax is chargeable on such transfer. .....

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of the property although an agreement to ultimately sell the property under settled terms is signed. In other words, the builder continues to remain the legal owner of the property. At the conclusion of the contract and completion of the payments relating thereto, another instrument called 'Sale Deed' is executed on payment of appropriate stamp duty. This instrument represents the legal transfer of property from the promoter to the buyer. 8.4 In other places a different patter .....

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to pay lesser stamp duty. In many cases, an instrument called 'Construction Agreement' is parrallely executed under which the obligations of the promoter to get property constructed and that of the buyer to pay the required consideration are incorporated. 8.5 These different patterns of execution, terms of payment and legal formalities have given rise to confusion, disputes and discrimination in terms of Service tax payment. 8.6. In order to achieve the legislative .....

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pe of the existing service, which otherwise remain unchanged." 29. The use of a legal fiction is a well known legislative device to assume a state of facts (or a position in law) for the limited purpose for which the legal fiction enacted, that does not exist. The Parliament is fully competent to enact such legal fiction. In the present case the Parliament has done precisely that; it has enacted a legal fiction, where a set of activities carried on by a builder for himself are de .....

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ve Assembly, Madras and Ors.: (1996) 2 SCC 353, the Supreme Court held that "By the decision of this Court it is fairly well settled that a deeming provision is an admission of the non-existence of the fact deemed. The Legislature is competent to enact a deeming provision for the purpose of assuming the existence of a fact which does not even exist. It means that the Courts must assume that such a state of affairs exists as real, and should imagine as real the consequences and incidents whi .....

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Bench in M. Venugopal v. Divisional Manager, LIC." In Manish Trivedi v. State of Rajasthan: (2014) 14 SCC 420, the Supreme Court held that "It is well settled that the legislature is competent to create a legal fiction. A deeming provision is enacted for the purpose of assuming the existence of a fact which does not really exist. When the legislature creates a legal fiction, the court has to ascertain for what purpose the fiction is created and after ascertaining this, to assume all t .....

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ruction of a complex the benefit of which is available to a prospective buyer who enters into an arrangement - whether by way of an agreement of sale or otherwise - for acquiring a unit in a project prior to its completion/development. 31. The controversy whether a legislature has the competence to enact a law has to be judged in the context of the pith and substance of that law. In Union of India v. H.S. Dhillon: (1972) 83 ITR 582(SC), a Constitution Bench of the Supreme Court applie .....

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ries in the three lists are not powers but fields of legislation. The power to legislate is given by Article 246 and other articles of the Constitution. See the observations of this Court in Calcutta Gas Co. v. State of West Bengal: AIR 1962 SC 1044. The entries in the three lists of the Seventh Schedule to the Constitution are legislative heads or fields of legislation. These demarcate the area over which appropriate legislature can operate. It is well settled that widest amplitude should be gi .....

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Dhillon: [1972] 83 ITR 582(SC). The lists are designed to define and delimit the respective areas of respective competence of the Union and the States. These neither impose any implied restriction on the legislative power conferred by Article 246 of the Constitution, nor prescribe any duty to exercise that legislative power in any particular manner. Hence, the language of the entries should be given widest scope, D.C. Rataria v. Bhuwalka Brothers Ltd.: [1955] 1SCR 1071, to find out wh .....

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of Hotel & Restaurant Association of India, etc., v. Union of India (UOI) and Ors: (1989) 178 ITR 97 ( SC) the Supreme Court explained: "Indeed, the law 'with respect to' a subject might incidentally 'affect' another subject in some way; but that is not the same thing as the law being on the latter subject. There might be overlapping; but the overlapping must be in law. The same transaction may involve two or more taxable events in its different aspects. But t .....

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ure of tax used for the levy. The measure of tax must have a nexus with the object of tax and it would be impermissible to expand the measure of service tax to include elements such as the value of goods because that would result in extending the levy of service tax beyond its object and would impinge on the legislative fields reserved for the State Legislatures. 36. In BSNL v. Union of India: (2006) 3 SCC 1, the Supreme Court explained the question whether value of SIM Cards could be .....

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ax on subject-matter which a fair reading of the entry does not cover. If in substance, the statute is not referable to a field given to the State, the court will not by any principle of interpretation allow a statute not covered by it to intrude upon this field." The Supreme Court further held that while a State may have legislative competence to levy sales tax, the same would not however permit the State to entrench on the Union List by including the value of service in the cos .....

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in those composite contracts which are by legal fiction deemed to be divisible Under Article 366(29-A), the value of the goods involved in the execution of the whole transaction cannot be assessed to sales tax. As was said in Larsen and Toubro v. State of Rajasthan: (SCC p. 395, para 47). "The cost of establishment of the contractor which is relatable to supply of labour and services cannot be included in the value of the goods involved in the execution of a contract and the cos .....

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of a complex - who is developing the complex for sale is, essentially, one of purchase and sale of developed property. But, by a legislative fiction, such agreements, which have been entered into prior to completion of the project and/or construction of a unit, are imputed with a character of a service contract; the works involved in construction of a complex are treated as being carried by the builder on behalf of the buyer. However, indisputably the arrangement between the buyer and the build .....

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the value of goods which are incorporated in the project by a developer. Levying a tax on the constituent goods or the land would clearly intrude into the legislative field reserved for the States under List II of the Seventh Schedule of the Constitution of India. 38. In Commissioner of Central Excise and Customs v. Larsen & Toubro (supra), the Supreme Court clearly explained the necessity for segregating the elements of services and sale of goods in a composite contrac .....

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ses into a prohibited exclusive field, it is liable to be struck down. In the present case, the dichotomy is between sales tax leviable by the States and service tax leviable by the Centre. When it comes to composite indivisible works contracts, such contracts can be taxed by Parliament as well as State legislatures. Parliament can only tax the service element contained in these contracts, and the States can only tax the transfer of property in goods element contained in these contracts. Thus, i .....

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ism for ascertaining the measure of tax, that is, the value of services which are charged to service tax. 40. Section 67 of the Act provides for valuation of taxable services. The said section as amended by Finance Act 2010 reads as under:- "67. Valuation of taxable services for charging Service tax - (1) Subject to the provisions of this Chapter, service tax chargeable on any taxable service with reference to its value shall,- (i) in a case where .....

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the amount as may be determined in the prescribed manner." 41. Prior to the amendment brought about by Finance Act 2010, Section 67 of the Act provided that the value of taxable services would be "the gross amount charged by the service provider for such service rendered by him". Section 67 of the Act was amended also to provide for value in cases where the consideration for the services was not wholly or partly consisting of money and in cases where the consideration f .....

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ent has made Service Tax (Determination of Value) Rules 2006 (hereafter 'the Rules'). However none of the rules provides for any machinery for ascertaining the value of services involved in relation to construction of a complex. 44. Rule 2A of the Rules provides for determination of the value of service in execution of a works contract and prior to 1st July, 2012 the said Rule read as under:- "2A. Determination of value of taxable services involved in the execu .....

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d in the execution of the said works contract. Explanation.- For the purposes of this clause,- (a) gross amount charged for the works contract shall not include value added tax or sales tax, as the case may be, paid, if any, on transfer of property in goods involved in the execution of the said works contract; (b) value of works contract service shall include, - (i) labour charges for execution of the works; (ii) amount paid to a sub-contra .....

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ply of labour and services; and (viii) profit earned by the service provider relatable to supply of labour and services; (c) Where value added tax has been paid on the actual value of transfer of property in goods involved in the execution of the works contract, then, such value adopted for the purposes of payment of value added tax, shall be taken as the value of transfer of property in goods involved in the execution of the said works contract for determining the value of .....

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hat where the gross amount charged includes the value of the land, in respect of the service provided by way of clause (8) of section 66E of the Act, service tax shall be payable on twenty five per cent. of the total amount including such gross amount; (B) in case of other works contracts including completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings not covered under subclause (A), service tax shall be payable on si .....

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d on goods and services supplied free of cost for use in or in relation to the execution of works contract, under the same contract or any other contract: Provided that where the value of goods or services supplied free of cost is not ascertainable, the same shall be determined on the basis of the fair market value of the goods or services that have closely available resemblance;" 45. Whilst Rule 2A of the Rules provides for mechanism to ascertain the value of service .....

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urt held as under:- "In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning to the st .....

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ressed by the Supreme Court in Govind Saran Ganga Saran v. CST: (1985) 155 ITR 144 ( SC) wherein the Court held as under:- "6. The components which enter into the concept of a tax are well known. The first is the character of the imposition known by its nature which prescribes the taxable event attracting the levy, the second is a clear indication of the person on whom the levy is imposed and who is obliged to pay the tax, the third is the rate at which the tax is imposed, and th .....

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question whether service tax could be levied on indivisible works contract under clauses (g), (zzd), (zzh), (zzq) and (zzzh) of sub-section 105 of Section 65 of the Act. The Court referred to various earlier decisions on the question whether a levy of tax could be sustained in absence of the machinery provisions and held that since neither the Act nor Rules provided for any machinery provisions to exclude the non-service element from a composite contract, the taxable services referre .....

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This is clear from the very language of Section 65(105) which defines "taxable service" as "any service provided". All the services referred to in the said sub-clauses are service contracts simpliciter without any other element in them, such as for example, a service contract which is a commissioning and installation, or erection, commissioning and installation contract. Further, Under Section 67, as has been pointed out above, the value of a taxable service is the gross amou .....

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ct the value of property in goods transferred in the execution of a works contract." 49. The Supreme Court further overruled the decision of this Court in G.D. Builders (supra) wherein this Court had, inter alia, held that clauses (g), (zzd), (zzh), (zzq) and (zzzh) of sub-section 105 of Section 65 of the Act would also take within their sweep indivisible composite works contracts. The Supreme Court further concluded that prior the enactment of the Finance Act 2007 - by virtue of .....

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vice components from the taxable services covered therein. The Rules also do not contain any provisions relating to determination of the value of services involved in the service covered under Section 65(105)(zzzh) of the Act. Thus the said clause cannot cover composite contracts such as the one entered into by the Petitioners with the builder. 50. In Maharashtra Chamber of Housing Industry (supra), the Bombay High Court upheld the constitutional validity of the impugned explanation b .....

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d Customs, Kerala v. Larsen & Toubro Ltd. (supra) in absence of machinery provisions to exclude non-service elements from a composite contract, the levy on services referred to in Section 65(105)(zzzh) could only be imposed on contracts of service simplicitor - that is, contracts where the builder has agreed to perform the services of constructing a complex for the buyer - and would not take within its ambit composite works contract which also entail transfer of property in goods as well as .....

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sale of goodwill and had noted that the machinery provisions did not provide for calculation of capital gains - which is the measure of tax for imposition of tax on gains from sale of capital assets - where the cost of acquisition was not ascertainable. The Court held that the charging Sections and the computation provisions together constitute an integrated code and the transaction to which the computation provisions cannot be applied must be regarded as never intended to be subjected to charge .....

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tral Excise v. Larsen and Toubro Limited (supra). In that case, the Supreme Court had affirmed the decision of the Orissa High Court in Larsen and Toubro Limited v. State of Orissa and Ors: (2008) 12 VST 31 (Orissa) wherein the Court held that Circulars or other instructions could not provide the machinery provisions for levy of tax. The charging provisions as well as the machinery for its computation must be provided in the Statute or the Rules framed under the Statute. The relevant extract fro .....

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e no statutory sanction cannot be cured by an appellate order. In other words, if the assessment order itself is not sustainable on account of unworkability of the provisions under which they are purportedly made, no purpose would be served by filing appeal against the said order and this question cannot be decided by the appellate authority under the Act. In the instant case, both the assessing officer and the appellate authority are bound to follow the instructions contained in the circulars. .....

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e cannot be filled up by the circulars which are purely ad hoc and administrative in nature and specially so when it relates to taxing law. It is a well-settled principle that in matters of taxation either the statute or the Rules framed under the statute must cover the entire field. Taxation by way of administrative instructions which are not backed by any authority of law is unreasonable and is contrary to article 265 of the Constitution of India. Therefore, the impugned .....

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for a machinery provision for excluding all components other than service components for ascertaining the measure of service tax. The abatement to the extent of 75% by a notification or a circular cannot substitute the lack of statutory machinery provisions to ascertain the value of services involved in a composite contract. 54. Insofar as the challenge to the levy of service tax on taxable services as defined under Section 65(105)(zzzzu) is concerned, we do not find any merit in the .....

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