2023 (10) TMI 171 - AT - Service Tax

Levy of service tax - construction of residential complex in respect of works contact - construction of residential complex under GnnRUM Scheme for Surat Municipal Corporation - HELD THAT - The works contract service of construction of residential complex for JawaharLal Nehru Urban Renewal Mission (JnRUM) is not liable to service tax being not a commercial in nature. This issue has been considered by this Tribunal in various judgments. One of the judgment of RJP INFRASTRUCTURE PVT LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST, AHMEDABAD 023 (9) TMI 1281 - CESTAT AHMEDABAD , this Tribunal considering various earlier judgments held that the service in question is not liable for service tax. Thus, it is settled that construction of residential complex under GnRUM Scheme is not liable to service tax. Accordingly, the demand in the present case is not sustainable. Hence, the impugned order is set aside. Appeal is allowed.

Summary

Issues Involved:
1. Liability of the appellant to pay service tax on the construction of residential complex under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) Scheme for Surat Municipal Corporation.
2. Applicability of service tax on construction services provided to Ahmedabad Municipal Corporation under JnNURM and for Safai Kamdar housing.

Summary:

The primary issue in this case was whether the appellant is liable to pay service tax on the construction of residential complexes under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) Scheme for Surat Municipal Corporation. The appellant's counsel argued that this issue is no longer res-integra, citing various judgments where similar constructions under government schemes were held non-taxable.

Upon careful consideration, the Tribunal found that the construction services provided under the JnNURM scheme are not liable to service tax as they are not commercial in nature. This conclusion was supported by previous judgments, including the case of Rjp Infrastructure Private Limited, where it was held that such services are non-taxable.

In a related case, the Tribunal also examined whether the appellant is liable to pay service tax under the category of Construction of Complex service for constructing houses under JnNURM for Ahmedabad Municipal Corporation and for Safai Kamdar housing. The appellant's counsel again argued that the issue is settled by various judgments, including those of M/s. Khurana Engineering Limited and DH Patel, which held that such constructions are not liable for service tax.

The Tribunal confirmed that the construction of residential complexes under the JnNURM scheme and for Safai Kamdar housing is intended for residential purposes for poor people and not for commercial activities. Therefore, these constructions are not liable to service tax. The Tribunal referred to several judgments, including those of M/s. Khurana Engineering Limited and Santosh Katiyar, which supported this view.

Additionally, the Tribunal noted that constructions for government organizations, such as the Gujarat State Police Housing Corporation Limited, are also not liable for service tax. This was supported by judgments in cases like S. Kadirvel and C.R. Patel, which clarified that constructions intended for personal use by government entities are excluded from service tax.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeals, confirming that the construction services under the JnNURM scheme and for Safai Kamdar housing are not liable to service tax.