We all know that construction service is taxable if turnover of services exceeds 10 lacks. But notification 26/2012 service tax provides various exemptions to construction services. Let’s have a look.
- If any person provides non commercial construction services to government or local authority or government authority, the whole service is exempt.
- Construction services (original) related to single residential unit other than part of a complex is also exempt.Single residential unit means a self contained residential unit which is designed for use, wholly or partially for residential purposes for one family.So service tax is payable if construction work is for more than one residential unit.If title of each floors is capable of being transferred to another person by municipal records , both the floors may be considered as separate single residential unit.
- Construction of Pipelines for water supply for government board is exempt. As per case law of Dinesh Chandra Agarwal Infracon vs CCE (2011)
- Service related to construction, erection, commissioning, installation, completion, fitting out , repair, maintenance, renovation, alteration of road, bridge, tunnel or termination for road transport for use by general public are exempt from service tax. General public means the body of people at large sufficiently defined by some common quality of public or impersonal nature.
- Construction, erection, commissioning, installation, completion, fitting out,repair, maintenance, renovation or alteration of a civil structure or any other work pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaas Yojana are exempt.
- Construction, erection, commissioning, installation, completion, fitting out,repair, maintenance,renovation or alteration of pollution control or effluent treatment plant except located as a part of a factory are exempt.
- Likewise, service related to structure meant for funeral , burial or cremation of deceased are exempt.
- Service related to Construction, erection, commissioning, installation of original works of port, airport , port or railway are exempt.So repair or maintenance services of airports, ports or railways are liable to service tax.
- Services related to Service related to Construction, erection, commissioning, installation of original works related to low cost houses up to a carpet area of 60 square meters per house in a housing project approved by competent authority are exempt from service tax.
- Services related to Service related to Construction, erection, commissioning, installation of original work for storage of agricultural products or cold storage are exempt.
- Construction, erection, installation of machinery for unit processing agricultural products like food stuff excluding alcoholic beverages are exempt. Installation of floor mill is exempt. Installation work for Dal mills, rice mills, milk diaries are exempt.
If you are new to file service tax return, watch this video