2013 (6) TMI 78 - HC - Service Tax

Work contract services - in respect of Railways - held that - A reading of the provisions of section 65(105)(zzzza) and 66 would show that any service rendered in relation to the execution of a works contract in respect of Railways which is excluded under clause (zzzza) referred to above will fall outside the definition of taxable service and consequently no service tax shall be leviable under Section 66 of the Act on the value of such services. With this clarification the writ petition stands disposed of.

Summary

Issues:
Clarification on taxability of services rendered in relation to the execution of a works contract in respect of Railways under Section 66 of the Finance Act, 1994.

Analysis:
The petitioner, M/s. Bangalore Metro Rail Corporation Ltd., sought clarification on the taxability of services provided in connection with the execution of a works contract related to Railways under Section 66 of the Finance Act, 1994. The petitioner's counsel requested the court to clarify that such services are not taxable under the Act. The court examined the relevant provisions of the Act, particularly Section 65 which defines "taxable service" and includes works contracts excluding those related to roads, airports, railways, transport terminals, bridges, tunnels, and dams. The court highlighted that services linked to the execution of a works contract concerning Railways, as specified in clause (zzzza) of Section 65, fall outside the definition of taxable service. Therefore, no service tax is applicable under Section 66 of the Act for services falling within this exclusion. The court provided a clear interpretation that services connected to works contracts concerning Railways are not subject to service tax under the Act.

The court's analysis focused on the specific exclusion of works contracts related to Railways under clause (zzzza) of Section 65 of the Act. By emphasizing this exclusion, the court clarified that services provided in relation to the execution of a works contract concerning Railways do not attract service tax under Section 66 of the Act. The judgment effectively resolved the issue raised by the petitioner regarding the taxability of such services. Consequently, the court disposed of the writ petition after providing the necessary clarification on the legal position concerning the taxation of services associated with works contracts related to Railways. The decision underscores the importance of a precise interpretation of statutory provisions to determine the tax liability of specific services, ensuring clarity and consistency in tax administration and compliance within the ambit of the Finance Act, 1994.