The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not leviable on the construction of a residential complex for the use of staff of Gujarat State Police Housing Corporation.
The issue was, whether the appellant, Shanti Construction is liable to service tax for the construction of a Residential Complex for Gujarat State Police Housing Corporation Limited.
Shri Jigar Shah, Counsel appeared on behalf of the appellant.
The judgments cited by the counsel are on the identical issue and the Tribunal has taken a view that the construction of the Residential Complex was for the use of Gujarat State Police Housing Corporation Limited for their staff, therefore the same will not be liable to service tax under the head ‘Construction of Residential Complex’.
In the case of Anand Construction Co., the Tribunal held “Generally, Government buildings or civil constructions are used for residential, office purposes or for providing civic amenities. Thus, normally Government constructions would not be taxable. However, if such constructions are for commercial purposes like local Government bodies getting shops constructed for letting them out, such activity would be commercial and builders would be subjected to Service Tax”
In many cases, the Tribunal held that “the service provided by the appellant is to establishments and organizations which are of non-commercial or non-industrial nature and therefore, the construction, renovation, repair work undertaken by them fall under the exclusion of the definition of ‘Commercial or Industrial Construction Service’ hence, we hold that the appellants are not liable to pay any service tax on such activity. However, we find that they have also done some work for commercial organizations in some of the Financial years however, the value of such work in our view is within the threshold limit of the exemption and therefore, the same also does not fall under the category of the service tax levy and therefore, we hold that no service tax is leviable. Accordingly, we hold that impugned Order-In-Appeals are without any merit and therefore, we set aside the same and appeals are allowed.”
While allowing the appeal, the two-member bench comprising Mr Ramesh Nair, Member (Judicial) and Mr C L Mahar, Member (Technical) held that the demand for service tax in the present case is also not sustainable.
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