2026-VIL-1148-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Construction of Roads as Sub-contractor – Appellant received consideration for services from three entities for construction of roads as a sub-contractor to the principal contractor of the Public Works Department - Whether services rendered by appellant for construction of roads as a sub-contractor to another contractor are exempt from service tax under Notification No. 25/2012-ST dated 20.6.2012 - HELD - The contracts of the appellant with the three entities were for construction of roads as sub-contractor. The Commissioner (Appeals) denied the benefit of the exemption on the ground that there were inaccuracies in the agreements supplied by the appellant - The inaccuracies or missing details in agreements or the presence of GSTIN in reconstructed agreements do not negate the nature of the services. The evidence on record demonstrates that the contracts were indeed for construction of roads which are exempted under Serial No. 13(a) for the main contractor, and as the appellant was a sub-contractor providing works contract services to another contractor providing exempted services, it qualifies for exemption under Serial No. 29(h). Accordingly, the demand of service tax on construction of roads as sub-contractor is set aside – The appeal is allowedrnrnService Tax Exemption – Construction of Individual Houses – Appellant received consideration for construction of individual houses. Respondent included this amount in the service tax demand contending that the appellant had not submitted documents proving ownership of land, blueprints of houses, or complete addresses of properties – Whether submission of land ownership documents, blueprints, and complete addresses in contracts is essential to claim exemption for construction of individual houses under Notification No. 25/2012-ST – HELD – The submission of documents of ownership of land, blueprints of construction, or indication of complete addresses in the contracts is not essential to avail the benefit of the exemption notification. The exemption for construction of individual houses under Serial No. 14(b) of the notification is available based on the nature of service provided and not on the procedural formality of documentary evidence regarding land ownership or architectural details. The appellant has undisputedly received consideration for constructing individual houses, and the nature of the service itself qualifies for exemption irrespective of missing documentary formalities – The demand of service tax on construction of individual houses is set aside.rnrnService Tax Exemption – Bank Interest – Appellant received bank interest during the relevant financial year, which was included in the service tax demand by the respondent –Whether bank interest received by the appellant constitutes consideration for a service and is liable to service tax – HELD – The interest received from the bank cannot be said to be a consideration for any service. Bank interest is a return on capital and not a service charge. Therefore, such receipts fall outside the purview of service tax. The respondent's inclusion of bank interest in the taxable service receipts is erroneous as it does not constitute consideration for any service – Demand of service tax on bank interest is set aside.rnrnService Tax Exemption – Small Service Providers – Whether the exemption for small service providers under Notification No. 33/2012-ST applies when the taxable value of services in any financial year is within the prescribed limit, notwithstanding the total turnover – HELD - The exemption under Notification No. 33/2012-ST for services up to ten lakhs in any financial year applies when the taxable value of services does not exceed the stipulated limit, provided the finding that other receipts are not exigible to service tax is established. Since other receipts previously included as taxable are actually not liable to service tax, those receipts cannot be counted towards the turnover limit. The actual taxable receipts for vehicles and machinery and HR PWD services, when other wrongly-included receipts are excluded, fall within the limit of ten lakhs in each respective financial year and are therefore entitled to exemption – The benefit of exemption under Notification No. 33/2012-ST is extended to the receipts for vehicles and machinery and HR PWD, and the corresponding demand is set aside.
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GSTAT Filing Near: Closing Resolutions...
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