The Ahmedabad bench Customs, Excise and Service Tax Appellate Tribunal (CESTAT) have held that the value of free supply material needs to be added with the gross value of construction service to avail of the benefit under service tax.
Smp Constructions Pvt Ltd, the appellant questioned that for availing the abatement under Notification No. 01/2006-ST dated 01.03.2006 whether the cost of the material provided by the service recipient required to be included in the gross value of construction service.
Shri Vinay Kansara, counsel for the appellant submitted that the issue is no longer res integra with the appellant’s case vide final order no A/12818-12819/2018 dated 26.11.2018 decided in favour of the appellant.
Shri Vijay G, Iyengar, Assistant Commissioner (AR) appeared on behalf of the Revenue and reiterated the finding of the Impugned order.
The tribunal in M/S Bhanya Builders Pvt.LTD held that “the value of free supply material needs to be added .”
On the interpretation of the explanation given in notification 15/2004 as well as Notification No.01/2006-ST, and in light of Judgement the two-member bench comprising Mr Ramesh Nair, Judicial Member and Mr C L Mahar, Technical Member held that the demand is not sustainable.
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