SERVICE TAX ON SERVICE PROVIDED TO DELHI METRO
SUBHASH SHARMA
(Querist) 12 January 2010
This query is : Resolved
Dear Sir,
>
>Our company is providing service of Maintenance to Delhi Metro.
>
>We are charging Bill with Service Tax.
>
>But Delhi Metro refused to pay Service Tax amount saying that :-
>
>They are exempt to Service Tax and given one copyin which written as follows :-
>
C2.3.5 “Delhi Metro Rail Corporation Ltd., a non-government Railway, is executing the
work under the “Metro Railways (Construction of Works) Act, 1978” extended to
Delhi Metro. Tenderers are requested to study the Section 65 & 66 of Finance
Act, 2005 (budget 2005-06) regarding Applicability of Service Tax along with the
relevant circulars and instructions in the matter issued by Ministry of Finance,
Department of Revenue and bid accordingly.”
Kindly Suggest service Tax will be charged on the bill or not.
>
>Thanks/Regards
>
>Subhash Sharma
APARNA NANDAKUMAR
(Expert) 24 February 2010
Dear mr.Subhash sharma,
Your stand that service tax is leviable on the maintenance and repair services is absolutely correct. It is true that there is an exemption as per Notificaion 17/2005-ST w.e.f. 7-6-2005 applicable to road, airports , raliways ,bridges and the like but the exemption is only with respect to services rendered in relation to site formation , clearance, excavation, earth moving and demolition services falling within the ambit of sub clause (zzza) of section 65(105) of Finance Act, 1994. This exemption cannot be extended to maintenance services done for the upkeep of the Railways because Maintenance, Management and repair services fall under a different catrgory of services under sub clause (zzg)of section 65(105) of Finance Act, 1994 which specifically includes within its fold mainteance done with respect to immoveable property when provided under a contract of maintenance.
