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2024 (6) TMI 133 - AT - Service TaxExemption of service by the Mega Exemption Notification - Works Contract Services provided to Maulana Azad National Institute of Technology, Bhopal, MANIT - MANIT falls within the definition of governmental authority as defined under Section 2(s) of the notification dated 20th June, 2012 or not - HELD THAT - It is clear from N/N. 25/2012-S.T., dated 20 Jun., 2012 and N/N. 12/2012-S.T. Superseded that any authority, which is set up by an Act of Parliament or is established by a Government is a Governmental authority and any services provided to a Governmental authority by way of construction, erection, commissioning, installation, even repair, maintenance, renovation or alternation of any civil structure are exempted from the purview of taxable services. The controversy, whether Educational Institutions i.e. Indian Institute of Technology, Patna and National Institute of Technology, Rourkela are covered by the definition of governmental authority in mega exemption notification and are eligible for exemption from the service tax, which otherwise applies to construction services, as noticed by the Adjudicating Authority had been decided by the Patna High Court in SHAPOORJI PALOONJI COMPANY PVT. LTD. VERSUS COMMISSIONER, CUSTOMS CENTRAL EXCISE AND SERVICE TAX AND OTHERS 2016 (3) TMI 832 - PATNA HIGH COURT . The said decision of the Patna High Court has been affirmed by the Apex Court in COMMISSIONER, CUSTOMS CENTRAL EXCISE AND SERVICE TAX, PATNA VERSUS M/S SHAPOORJI PALLONJI AND COMPANY PVT. LTD. ORS. AND UNION OF INDIA ORS. VERSUS M/S SHAPOORJI PALLONJI AND COMPANY PVT. LTD. 2023 (10) TMI 748 - SUPREME COURT . Both the High Court and the Apex Court observed that the amended definition of governmental authority was introduced so that the exemption base for service tax was expanded even to an authority or a board or any other body set up by an Act of Parliament or a State legislature without the condition of having been established with 90% or more participation by way of equity or control by government carrying out any function and entrusted to a Municipality under Article 243W of the Constitution. The appellant in the present case is rendering the service of Alteration, Renovation and Whitewash of the staff quarters in the residential complex for exclusive use of employees of MANIT. The said services are specifically covered under the Sl.No.12 of the mega exemption notification, which provides services to the Government or a Government Authority by way of Construction, Erection, Commissioning, Installation, Completion, Fitting out, Repair, Maintenance, Renovation, or Alteration of civil structure, predominantly for use, other than for commerce, industry, or any other business or profession - In the case of Shapoorji Pallonji Pvt. Ltd, the appellant was providing the services of construction of buildings/facilities for the academic complex in December, 2012 and a notice to pay service tax was issued on 13.11.2013 and again on 05.09.2014 and the High Court held that service tax is not chargeable as the same is exempted from payment in terms of Notification dated 20.06.2012 as amended - In the present case also the service tax proposed to be charged for the period 2013-14 and 2014-15 is unsustainable. Hence, no service tax is payable by the appellant and the Adjudicating Authority was right in dropping the demand in view of the exemption granted under the notification. The impugned order, therefore, deserves to be set aside - Appeal allowed.
Issues involved: Challenge to order confirming demand of service tax under Mega Exemption Notification for Works Contract Services provided to educational institution.
Summary: The appellant provided Works Contract Services to an educational institution, claiming exemption under Mega Exemption Notification. The dispute arose when the Commissioner (Appeals) confirmed the demand of service tax, which was challenged in the present appeal. The appellant argued that the services provided were exempted under Serial No.12 of the Notification as the institution fell within the definition of "governmental authority." The key issue was whether the educational institution qualified as a "governmental authority" under the Notification, thereby entitling the services provided to exemption. The Tribunal referred to relevant provisions of the Notification to determine the eligibility criteria for exemption. The Tribunal considered a previous case involving a similar educational institution and concluded that the institution was indeed a "governmental authority" as defined under the Notification. The Tribunal further analyzed a decision by the Patna High Court regarding the coverage of educational institutions under the definition of "governmental authority." The High Court's decision was affirmed by the Apex Court, emphasizing the expanded exemption base for service tax. The Tribunal applied this analysis to the present case and concluded that the educational institution in question met the criteria for exemption under the Notification. Ultimately, the Tribunal ruled in favor of the appellant, stating that no service tax was payable as the services provided were covered under the exemption granted by the Notification. The impugned order confirming the demand was set aside, and the appeal was allowed with consequential benefit to the appellant.
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