Please Help: service tax

Dear Shilpa,

Section 65 (64) of the Finanace Act, 1994 provides that 'management, maintenance or repair service' interalia means any service provided by any person under a contract or agreement in relation to (i) management of properties, whether immovable or not, (ii) maintenance or repair of properties, whether immovable or not. Further, the dictionary meaning of conserving and management in respect of property is similar i.e. to protect from loss or harm or to preserve. Thus, in the instant case, the services given for conserving the arcology structures for govt. will get covered under 'management, maintenance and repair' service and accordingly service tax will be payable.

Hope the reply serves the purpose.

Dear Shilpa,

In service tax, works contract is leviable to tax only for the purposes specified in Explanation to Section 65 (105) (zzzzza) and not otherwise. Therefore, such contracts cannot be brought under the purview of 'works contract service'.

Further, if you are able to prove that the said work undertaken by you is indeed an statutory obligation for the government on whose behalf its performed by you, then you can save the entire service tax and you need not pay any amount as service tax.

I trust the above clarifies your additional query.

Dear Ashish, as per my view even if it can be proved that it is a statutory obligation for the government service tax will be levied as Master Circular no 96/2007 has clearly mentioned that

"Activities assigned to and performed by the sovereign / public authorities under the provisions of any law are statutory duties. The fee or amount collected as per the provisions of the relevant statute for performing such functions is in the nature of a compulsory levy and are deposited into the Government account.
Such activities are purely in public interest and are undertaken as mandatory and statutory functions. These are not to be treated as services provided for a consideration. Therefore, such activities assigned to and performed by a sovereign / public authority under the provisions of any law, do not constitute taxable services. Any amount / fee collected in such cases are not to be treated as consideration for the purpose of levy of service tax."

But in the given case even if we can prove that it is a statutory duty being performed by other party on government behalf the other two point is also needs to be proved those are 1. "The fee or amount collected as per the provisions of the relevant statute for performing such functions is in the nature of a compulsory levy" and 2. "are deposited into the Government account", which is negative in the given case, so Exemption under circular no 96/2007 will not be available in the given case. Please Comment and have a discussion on this part.

Dear Unmesh,

Please refer the judgment of Hrrshitta reported at 28 STT 105 and Bnas Cements given by Delhi Cestat so as to understand the intention behind such exlusion.