O & M Contract, Service Tax

[N Balachandran]

Dear sir

Could you pl tell me the service tax applicability on the O & M contract which is being exeucted for Water Supply and Sewage Board ( Govt dept ).  Will it attact the Service tax under Work contract Service?

Since the Work Contract service rendered for Water Supply Board is exempted from payment of Service tax, Will the exemption benefit is also available for O & M contract?  Pl clairfy

Regards

 N.balachandran

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

     Please see Sl. No. 25 (a) of Notification No. 25/2012-ST dated 20.06.2012 as amended.  Against this Sl. No. it is mentioned that 'services provided to Government, a local authority or governmental authority  by way of carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health etc.  In my opinion Water Supply and Sewerage Board is an independent body which cannot be called Government, a local authority or governmental authority.  Hence service rendered to the said Board is liable to service tax.