The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that no service tax leviable on services of design work of slaughter house established for kolkata municipal corporation.
The respondent has undertaken the work of Design & Engineering, Land & Site Development & Civil works etc. for construction of slaughter house for Kolkata Municipal Corporation. The Revenue was of the opinion that the said activity should have been subjected to service tax. Accordingly, a show cause notice dated 21.12.2016 was issued to the Respondent.
Entry at Serial No 12 (a) of the Mega Exemption Notification No.25/2012-ST dated 20.06.2012 notes that all the services provided to the Government, a local authority or a governmental authority, have been exempt from the payment of service tax.
In case of Ganpati Mega Builders (India) Pvt. Ltd, it was observed that “undisputedly the appellant has rendered construction service to the Mandi Samiti, which is a statutory authority. We, further find that the services provided to Mandi Samiti for construction services in the market yard are not commercial in nature. Accordingly, this Tribunal held that Mandi Samiti or Board are not liable to Service Tax on renting of immovable property used for storage of agricultural produce in the market area.”
A Two-Member Bench comprising PK Choudhary, Judicial Member and Sanjiv Srivastava, Judicial Member observed that “We find that the slaughter house was established for Kolkata Municipal Corporation in terms of Article 243W read with Schedule 12th of the Constitution of India. Nothing as observed by the Commissioner (Appeals) has been placed on record to show that the said slaughter house was for commerce and industry. On the contrary in terms of Article 243W this was the responsibility of the municipal corporation. That being so, Appellant is entitled to benefit of Sr. No.12(a) of Mega Exemption Notification No.25/2012-ST dated 20.06.2012.”
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