2026-VIL-1086-CESTAT-BLR-ST
  1. Home
  2. 2026-VIL-1086-CESTAT-BLR-ST

SERVICE TAX CESTAT Cases

Service Tax – Majority Order - Classification of Site Formation Services as Works Contract - Classification of services rendered in relation to development of residential layouts - Appellant undertook conversion of agricultural land to residential use, obtained statutory approvals, and executed extensive civil infrastructure works prior to selling developed sites to housing societies and individual buyers. The assessee had also paid VAT under a composition scheme under State VAT Act and had voluntarily obtained service tax registration under works contract category - Whether the services rendered by the appellant as to be classifiable under ‘Site Formation and Clearance, Excavation, Earth Moving and Demolition Service’ as held by the Member (Technical) or whether the services rendered by the appellant as to be classifiable under ‘Works Contract’ as held by the Member (Judicial) - HELD - The activities undertaken by the assessee involve transfer of property in goods in the execution of the contract, encompassing construction, erection, completion, fitting out and alteration of immovable property, which are hallmarks of works contract as defined under Section 65(54) of the Finance Act, 1994. The court applied the principle laid down by the Supreme Court in Larsen and Toubro that in composite contracts involving both goods and services, the most specific description must be preferred over general description, and that service tax cannot be imposed on a portion of the total consideration. The assessee had paid VAT on composition basis under State law, which triggers the Board's Circular clarification that contracts treated as works contract for VAT purposes shall be treated as works contract for service tax purposes – It is observed that approximately 70 per cent of the total value comprises cost of materials and infrastructure facilities, demonstrating a composite nature of the contract. The site formation service under Section 65(97a) refers to preparatory activities antecedent to construction, while the present activities involve comprehensive construction and installation services that extend beyond mere site formation and clearance – All the activities carried out in respect of movable or immovable property wherein transfer of property is involved and the supply of goods on payment of VAT is involved would fall under the category of ‘Works Contract’ only. Applying the cited case-laws, the statutory provisions and the Board’s clarification, it is held that the services provided by the appellant falls within the classification of ‘Works Contract service’ only – Ordered accordingly
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

GSTAT Outreaches, Filing Intricacies...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?