Digging of ringwell, Service Tax

[ramkishore gupta]

Respected All

I would like to know weather service tax is applicable on the amount paid to me for digging and making of a new well paid by some private business entity for the welfare of public

Posts / Replies

[KASTURI SETHI]

The activity of digging well (digging of water sources) is covered under the main definition of 'Site Formation and Clearance, Excavation, Earth moving and Demolition Services' under the erstwhile Sections 65(105)(zzza) and 65(97a) of the Finance Act but excluded due to Exclusion clause- hence it was not chargeable to Service Tax prior to 1.7.2012.

After 1.7.12, it is exempted only if this service is provided to Govt., local authority or Govt. authority for irrigation purpose. (Notification No.25/12-ST dated 20.6.12 as amended Serial No.12 (d)} You have provided service to private business entity and it is not for irrigation purpose. Hence not eligible for exemption.

[ramkishore gupta]

Any abatement available if contractor do digging work for well and also provide material for constructing the well

[KASTURI SETHI]

No abatement is available.