2023 (4) TMI 438 - AT - Service Tax

Levy of Service Tax - construction service provided by the appellant to Surat Municipal Corporation for construction of residential complex under Jawaharlal Nehru National Urban Renewal Mission (JnNURM) and construction service provided to Gujarat State Police Housing Corporation Limited (GSPHCL) - HELD THAT - The issue of levy of service tax on the construction service in respect of above categories have been categorically held as non taxable. In the case of M/S JETHANAND ARJUNDAS SONS VERSUS CCE ST. INDORE 2018 (11) TMI 757 - CESTAT NEW DELHI , the Tribunal held that The construction of Vishwavidyalay for M. P. Laghu Udyog is also for public welfare and not for commercial purpose, hence not taxable in terms of Circular No.80/2004 dt 17.09.2004. In respect of construction service provided to the service recipient M/s. GSPHCL and Surat Municipal Corporation under Jawaharlal Nehru National Urban Renewal Mission are non-taxable - the demand in the present case is not sustainable. Appeal allowed.

Summary

Issues Involved:
1. Whether the construction service provided by the appellant to Surat Municipal Corporation under JnNURM is liable to service tax.
2. Whether the construction service provided to Gujarat State Police Housing Corporation Limited (GSPHCL) is liable to service tax.

Summary:

Issue 1: Construction Service to Surat Municipal Corporation under JnNURM
The appellant argued that the construction services provided under JnNURM for the Surat Municipal Corporation are not taxable, citing several precedents. The Tribunal referenced multiple judgments, including M/S Ganpati Mega Builders (India) Pvt. Ltd. vs. Commissioner, Customs, Central Excise & Service Tax, Agra and M/S Jethanand Arjundas & Sons Versus CCE & S.T. Indore, which held that construction activities under government schemes intended for personal use are not taxable. The Tribunal concluded that the construction services provided under JnNURM are non-taxable, as these services are intended for personal use and public welfare.

Issue 2: Construction Service to GSPHCL
The appellant contended that the construction services provided to GSPHCL are also non-taxable. The Tribunal reviewed similar cases, such as M/s. Sima Engineering Constructions vs. CCE, Trichy and C R Patel Tribunal Order, which determined that construction services for residential complexes intended for personal use by police personnel or other specific groups are excluded from service tax. The Tribunal noted that the definition of "residential complex" under Section 65(91a) of the Finance Act, 1994, excludes complexes intended for personal use. Consequently, the construction services provided to GSPHCL fall under this exclusion and are not subject to service tax.

Conclusion:
The Tribunal concluded that the construction services provided by the appellant to both Surat Municipal Corporation under JnNURM and GSPHCL are non-taxable. The impugned order was set aside, and the appeal was allowed with consequential relief.