Indivisible Works Contract – Exclusions

It is interesting to note that while introducing the concept of service tax on indivisible works contract various exclusions are also made such as works contract in respect of roads, airports, airways transport, bridges, tunnels and dams. These infrastructure projects have been excluded and continue to be excluded presumably because they are conceived in the national interest. If the submission of the Revenue department was right each of these excluded works contract could be taxed under the five sub-heads of section 65(105) contained in the Finance Act, 1994. For example, a works contract involving the construction of a bridge or dam or tunnel would presumably fall within Section 65(105)(zzd) as a contract which relates to erection, commissioning or installation. It is clear that such contracts were never intended to be the subject matter of service tax. Commissioner Central Excise and Customs v. ABB Limted, (2016) 1 SCC 170.

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Filed under Indivisible Works Contract, Service Tax

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