The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the construction services provided to construct houses for slum people under a scheme of the Government is not subject to service tax.
In the instant case, the appellants were engaged in the construction of houses for slum people under two government scheme i.e. Jawaharlal Nehru National Urban Renewal Mission (JNNURM) & Valmiki Ambedkar Awas Yojana (VAMBAY), Awasi Vishwavidyalaya for MP Laghu Udyog. The department demanded service tax from the appellant by finding that they had provided Commercial or Industrial Construction Service and Construction of Complex service but failed to pay service tax thereon.
Before the Tribunal, the appellant contended that the appellants have constructed houses for the economically weaker section under JNNRUM & VAMBAY schemes in terms of the contract awarded to them by Indore Development Authority. The above schemes are Government scheme under which the units are allocated to slum people on subsidized rate and it is for the uplifitment of poor people in India as such, not liable to service tax.
After hearing both sides, the Tribunal held that the activity of constructing houses for slum people under the government schemes is not taxable under Construction of Complex Services/ Works Contract/ CICS as it is intended for personal use.
“The issue is no longer res integra as squarely covered by Tribunal decision in the case of CCE & ST vs Ganesh Yadav (Supra). As regards services to SEZ we find that this issue is also covered by the decision of the Tribunal in the case of Reliance Port and Terminals Ltd. Vs CCE & ST (Supra),” the Tribunal added.
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