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Composition Scheme for Ongoing Projects

Posted by on in Service Tax
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CESTAT rules in favour of assessee, allows composition scheme w.e.f. June 1, 2007 i.r.o. ongoing works contracts on which service tax was paid, in light of SC decision in L&T Ltd and others; When works contracts were not liable to service tax before June 1, 2007, opting such scheme for contracts entered prior thereto cannot be called midway migration, and SC's Nagarjuna Construction Co. Ltd. decision would have no consequence, holds CESTAT; However, clarifies that if assessee did not opt for composition scheme w.e.f. June 1, 2007 or did not avail same from very beginning on contracts entered thereafter, it would be dis-entitled in light of said SC judgment; Further rules on taxability of ‘mobilization advance’ received from clients in view of Sec 67 of Finance Act, states that (i) same not liable to tax i.r.o. contracts executed prior to June 1, 2007, (ii) w.r.t. ongoing contracts executed before June 1, 2007, tax payable on such advance as if same received after said date, not w.r.t. date of rendition of service, and (iii) same taxable w.r.t. contracts entered on or after June 1, 2007; Lastly, sets aside rejection of abatement option under Notification Nos. 15/2004-ST, 18.2005-ST and 1/2006-ST for including value of free of cost material, in light of Larger Bench judgment in Bhayana Builders (P) Ltd : Delhi CESTAT

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  • Guest
    Allen Joseph Thursday, 15 December 2016

    Hi, Could you please give me the citation for this CESTAT ruling.

  • Guest
    Naimish Monday, 19 December 2016

    Citation :- 2015 (38) S.T.R. 38 - Tri. Del. - AHLUWALIA CONTRACTS INDIA LTD. Versus COMMR. OF SERVICE TAX, NEW DELHI

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