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Service Tax Case Law - Commercial or industrial construction service.
THE COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, PUNE - III Vs B.J. SHIRKE CONSTRUCTION TECHNOLOGY PVT LTD
Service Tax - Commercial or industrial construction service – whether construction of Sports Complex is commercial or industrial construction within the meaning of Section 65(25b) of the Finance Act - whether user of the stadium area to the extent of 1/3rd of the total area for commercial purpose would tantamount to 'commercial or industrial construction service'.
HELD – the dominant user of the sports complex is non-commercial. The definition uses the words “used or to be used primarily for commerce or industry” clearly indicating that the user is to be exclusively for commercial purpose or at least it must be primarily for commercial purpose. The definition leaves no doubt that if the predominant user of the “sports stadium” is not commercial, then the same cannot be subjected to levy of service tax.
Thus, in the present case, though an area to the extent of 1/3rd is used for commercial purpose prescribing separate rates for such user, this by itself is not sufficient to attract service tax - while pursuing their object of popularizing sports by selecting best available means, incidental charges for the usage and the said revenue will not convert the activities into commercial use - The Tribunal order is upheld and revenue appeal is dismissed.