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Central Excise - liability towards National Calamity Contingent Duty (NCCD) of a assessee, which is exempted from payment of Central Excise Duty under the CEA, 1944 - whether, even though the NCCD is in the nature of an excise duty, its incidence being on the product, rather than on the value of the excise duty, that itself would make any difference to the applicability of the NCCD to excise exempt units.

HELD – the NCCD is in the nature of excise duty. It has to bear the same character as those respective taxes to which the surcharge is appended. NCCD will not cease to be an excise duty, but is the same as excise duty, even if it is levied on the product. Thus, when NCCD, at the time of collection, takes the character of a duty on the product, whatever may be the rationale behind it, it is also subject to the provisions relating to excise duty, applicable to it in the manner of collection as well as the obligation of the taxpayer to discharge the duty.

Once the excise duty is exempted, NCCD, levied as an excise duty cannot partake a different character and, thus, would be entitled to the benefit of the exemption notification. The exemption notification also states that the exemption is from the “whole of the duty of excise or additional duty of excise” - the appellant would not be liable to pay the NCCD – the impugned High Court Order is set aside and assessee appeal is allowed.


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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.

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GST – Tamil Nadu AAR - Whether liaison office (
Also known as a representative office) is liable to pay GST - Whether a liaison office is required to be registered under GST Act - Whether the Activities of a liaison office amount to the supply of services.

HELD - the applicant/ liaison office is working as per the terms and conditions stipulated by RBI and the reimbursement of expenses and salary of employees is paid by Holding company to the liaison office. No consideration for any activity is being charged by the liaison office and the liaison office does not have any business activities of its own as specified by RBI conditions.

The liaison activities being undertaken by the applicant when strictly in line with condition specified by RBI permission letter do not amount to supply under CGST and SGST Act - the Applicant is not liable to pay CGST, SGST or IGST, as applicable - the Applicant is not required to get itself Registered under GST for the liaison activities.

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GST – Tamil Nadu AAR – The value of supply of services provided by the Applicant in the project wherein the Applicant has entered into two separate agreements, viz., one for 'Sale of undivided share of land' and the other for 'Construction' with the customers, the measure of levy of GST on the supply of service of 'Construction' shall be 2/3rd of the total value charged for construction service and amount charged for transfer of undivided share of land, as per entry No. 3(i) of Notification No. 11/2017-C.T.(Rate) dated 28.06.2017 as amended.

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Supply of Medical instruments: Original Advance Ruling Order dated 26-9-2018 in Abbott Healthcare (P.) Ltd., In re [2018] 98 taxmann.com 156 (AAR-KERALA) is upheld as legally correct and proper and it is ruled that placement of specified medical instruments to unrelated customers like hospitals, labs etc.,for their use without any consideration, against an agreement containing minimum purchase obligation of products like reagents, calibrators, disposals etc., for a specific period constitute composite supply, principal supply being transfer of right to use any goods for any purpose is liable to GST under Sr. No. 17(iii).

Heading 9973 of Notification No. 11/2017-Central Tax (Rate) dated 28-6-2017- Abbott Healthcare (P.) Ltd., In re - [2019] 103 taxmann.com 159 (AAAR-KERALA).

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Service Tax demand on cleaning services rendered to the Child Trust Hospital - non-commercial activity - revenue in appeal against impugned ruling that hospital being a charitable trust is a non-commercial building, the assessee is not liable to pay service.

HELD - If a hospital merely collects registration fees for registration of the patient and does not collect expenses for treatment, it cannot be said that the said hospital would fall out of the category of non-commercial building/hospital. The department having failed to establish with evidence, that Child Trust Hospital is a commercial building, the conclusion arrived by the Commissioner (Appeals) that the said hospital is a non-commercial hospital and the services rendered by the assessee to the hospital would not come within the purview of service tax requires no interference.

Apart from alleging that the assessee did not disclose the service tax payable under cleaning service, there is no allegation of suppression of facts on the part of the assessee, the conclusion of the Commissioner (Appeals) that demand for the extended period cannot sustain requires no interference, so also the penalty has been rightly set aside - answered in favour of assessee.

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Service Tax - Financial Leasing Service - determination of the amount that has to be reversed by the appellants when common inputs/input services are used for providing output services – revenue stand that appellant has to consider the 90% which enjoys exemption from payment of service tax as exempted services and include this value for arriving at the amount that has to be reversed – assessee view that the said 90% services are not wholly exempted.

HELD - For Financial Leasing Services under Section 65(105)(zm), service tax is payable on a part of the value of such services and only 90% is exempted as per Notification No. 04/2006. Since service tax is payable on 10% of the value, it cannot be said that the services are wholly exempt from payment of service tax. The definition of exempted services uses the word “exempt from the whole of the service tax”. The formula prescribed in Rule 6(3A) also uses the word “exempted services” and is not qualified by saying exempted services as well as that part of the services which are exempted. Therefore, for applying the formula, only those services which are wholly exempted from service tax can be included to indicate the value of exempted services.

The Revenue is not justified in considering the portion of value of taxable service exempted in the formula for determining the amount to be reversed - When the Notification grants exemption to the extent of 90%, the only obvious conclusion is that the balance 10% should suffer tax and accordingly, tax liability is required to be requantified – The assessee appeal is allowed.

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Jindal Water Infrastructure Ltd.

CESTAT allows assessee’s ‘rectification of mistake’ (ROM) application, finds clubbing of contracts between parties involving separate supply of material and erection work unsustainable absent interlinking of both; Observes, under supply contract, assessee purchased goods from other manufactures/suppliers of goods and resold goods to principal, in the course of transit as specified u/s 3(b) of Central Sales Tax Act,1956 (CST Act)and under erection contract, assessee used and added cost of material being cement and steel.

Consequently, finds error in final CESTAT's order whereby it has been considered that supply & transfer to the principal is by way of accretion under erection contract, notes that, while doing erection work, ownershipof items or materials being pipe, etc, was already with the principal and assessee could not have again transferred material, supplied under supply contract, by way of work contract or service contract; Further, holds that Notification No. 23/2009-ST dated July 7, 2009, providing that the gross amount under “works contract” shall include a value of all goods used in execution of works contract is applicable prospectively, and not applicable where execution commenced and/or payment is received on or before said date.

Holds assessee liable to Service Tax only on erection contract under the normal (and not composition) scheme and allows assessee’s appeal while directing him to file fresh computation of tax payable and pay tax (if any) or claim refund.

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Service Tax - Denial of credit on the ground that assessee had not furnished the cenvat return or abstract or details of the cenvat credit availed - duty paying documents in terms of Rule 9 of CCR, 2004 – eligibility to Cenvat Credit on the e-statement of National Payments Corporation of India (NPCI) – denial of cenvat credit for want of original invoices 

HELD - The assessee as a Member Bank, has entered into an agreement with NPCI for intermediary network switching and other support services for accounting and settlement of transactions made on the ATM and integrating the same with the accounts of the customers, in the books of the member banks - In nutshell, the agreement provides for smooth operation of member banks regarding transaction through credit or debit cards or such other instruments, to the customers who perform transactions through ATMs for specified services - From a perusal of the statement issued by NPCI, it is a self-contained document incorporating all the mandatory requirements of proviso to Rule 4A and in any case, NPCI is not a private body just to ignore its statement; as to the nature of service, there is an agreement in place.

It is not the case of the Revenue that NPCI has not filed its ST-3 return or that there was any contravention by NPCI whereby a doubt is entertained as to the transactions, to deny cenvat credit availed by the assessee on its payment to NPCI - it is the settled legal the position of law that even photocopies of invoices are the valid document - Denial of cenvat credit on the photocopy of the invoices is not justified and hence the same is set aside - Appeal is partly allowed.

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