9911796707
TMI Blog2023 (11) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... ss entity. It is also an admitted position that they are Governmental authority , though in terms of Notification No.25/2012-ST as well as in terms of relevant documents perused by the Adjudicating Authority. A holistic view would indicate that even though they might be considered as body corporate, they cannot be considered as business entity, which intrinsically involves profit motive. The collection of processing charges or a cost markup on the medicines purchased on behalf of the Government and supplied as per their direction would not make them a business entity, per se. There is no other evidence on record to suggest that they are a business entity - they are not required to pay any service tax on reverse charge basis on the WCS provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the service is that of WCS. He has, however, considered the availability of Notification No.25/2012-ST as amended by Notification No.02/2014-ST (by way of substitution) and came to the conclusion that the WCS provided by Shri Satya Sai Constructions to M/s APMSIDC in respect of works carried out against work orders mentioned at S.No.1 to 6 of Para 18.23 of OIO, were covered under Notification No.25/2012- ST dt.20.06.2012 as amended. He, however, did not allow the benefit of the same exemption in respect of work order at S.No.7, which was for the construction of BSc Nursing College Hostel Building at Singupuram on the grounds that the work order was given on 06.02.2016 and the exemption notification as amended was applicable only to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cieties Registration Act, 2001, the registration of a society shall render it a body corporate having perpetual succession and a common seal and therefore, as APMSIDC was registered, it would be deemed to be a body corporate. He has extended the benefit of Notification No.25/2012-ST, which basically exempts services provided to the Government of local authority or a governmental authority by way of construction, erection, commissioning, etc. However, the same was exempted only up to 28.02.2015, under S.No.12A of the notification and the said exemption continued on the same services in case of contracts which were entered prior to 01.03.2015. Further, having considered the Government Order under which the APMSIDC was created by the Andhra Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r alia, partnership firm to a business entity registered as body corporate, both service provider and service recipient would be liable to pay service tax in proportion of 50% - 50%. Therefore, the only limited issue is whether they are business entity or not. The Commissioner (Appeals) has taken a view that if they are admittedly, body corporate, they are also business entity. However, from the Order, this is not forthcoming as to what made him to consider APMSIDC as business entity. 8. In SCN, at Para 9.9, the department felt that since APMSIDC is procuring drugs and equipments and charging supervision charges, varying from 2% to 7% on the cost and therefore, that cannot be treated as Governmental agency and instead it appears to be a bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness entity, which intrinsically involves profit motive. The collection of processing charges or a cost markup on the medicines purchased on behalf of the Government and supplied as per their direction would not make them a business entity, per se. There is no other evidence on record to suggest that they are a business entity. Therefore, on this count itself, they would not be required to pay any service tax on reverse charge basis on the WCS provided to them by M/s Satya Sai Constructions and therefore, Notification No.30/2012-ST would not be applicable to them. 10. Therefore, neither Original Order nor Impugned Order has been able to establish that they will be within the ambit of Notification No.30/2012-ST and therefore, liable to pay 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
