2025-VIL-1988-CESTAT-AHM-ST
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SERVICE TAX CESTAT Cases

Service Tax - Construction of residential complex for Government body, Work contract service – Appellant was engaged in construction of civil works for various Government Departments and entities - Whether the construction of residential complex for GSPHCL and Gujarat Rajya Pathya Pustak Mandal is liable to service tax – HELD - The construction of residential complexes for government bodies like GSPHCL, which are intended for personal use of government employees, is excluded from the definition of "residential complex" and thus not liable to service tax. The GSPHCL is a 100% government-owned entity, and the residential complexes constructed were for the personal use of government employees - the services provided by the appellant to M/s GSPHCL and Gujarat Rajya Pathya Pustak Mandal fall under the category of services provided to the government for personal use and hence, no tax liability arises on the appellant in respect of such services. As far as the period prior to 01.06.2007 is concerned, since the services have been provided to the government, therefore, no service tax liability arises on the appellant even for the period prior to 01.06.2007 - The service tax demand on construction of residential complex is set aside but the demand and penalties on GTA service is upheld – The appeal is partly allowed - Whether the service tax demand on GTA service is valid – HELD - In the instant case, there is no dispute on non-payment of service tax on GTA service under reverse charge mechanism, delayed registration under service tax as well as non-filing of ST-3 returns for the relevant period. Therefore, penalty imposed on the appellant under Section 76 and 77 of the Finance Act, 1994 in respect of GTA Service is upheld. If appellant had paid service tax under RCM at the relevant time, they would have been entitled to cenvat credit of the same. The appellant certainly deserves sympathy on this count as far as imposition of penalty under section 78 is concerned. Therefore, the penalty imposed under section 78 of the Finance Act, 1994 is set aside
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