SIGN IN SUBSCRIBE

News Update

Cus - When there is nothing on record to show that appellant had connived with other three persons to import AA batteries under the guise of declaring goods as Calcium Carbonate, penalty imposed on appellant are set aside: HCCus - The penalty imposed on assessee was set aside by Tribunal against which revenue is in appeal is far below the threshold limit fixed under Notification issued by CBDT, thus on the ground of monetary policy, revenue cannot proceed with this appeal: HCGST -Since both the SCNs and orders pertain to same tax period raising identical demand by two different officers of same jurisdiction, proceedings on SCNs are clubbed and shall be re-adjudicated by one proper officer: HCFormer Jharkhand HC Chief Justice, Justice Sanjaya Kumar Mishra appointed as President of GST TribunalSale of building constructed on leasehold land - GST implicationI-T - If assessee is not charging VAT paid on purchase of goods & services to its P&L account i.e., not claiming it as expenditure, there is no requirement to treat refund of such VAT as income: ITATBengal Governor restricts entry of State FM and local police into Raj BhawanI-T - Interest received u/s 28 of Land Acquisition Act 1894 awarded by Court is capital receipt being integral part of enhanced compensation and is exempt u/s 10(37): ITATCops flatten camps of protesting students at Columbia UnivI-T - No additions are permitted on account of bogus purchases, if evidence submitted on purchase going into export and further details provided of sellers remaining uncontroverted: ITATTurkey stops all trades with Israel over GazaI-T- Provisions of Section 56(2)(vii)(a) cannot be invoked, where a necessary condition of the money received without consideration by assessee, has not been fulfilled: ITATGirl students advised by Pak college to keep away from political eventsI-T- As per settled position in law, cooperative housing society can claim deduction u/s 80P, if interest is earned on deposit of own funds in nationalised banks: ITATApple reports lower revenue despite good start of the yearI-T- Since difference in valuation is minor, considering specific exclusion provision benefit is granted to assessee : ITATHome-grown tech of thermal camera transferred to IndustryI-T - Presumption u/s 292C would apply only to person proceeded u/s 153A and not for assessee u/s 153C: ITATECI asks parties to cease registering voters for beneficiary-oriented schemes under guise of surveysST - Since Department itself admits that service carried out by appellant is that of 'Mining Services' w.e.f. 01.06.2007, thus demand for earlier period has been made only to fasten excess Service Tax demand on appellant which cannot sustain: CESTATICG rescues fisherman with head injury onboard IFB St. Francis off the Gujarat coastCX - When physical stock verification carried out by Officers was not fool proof and there were anomalies, benefit of doubt should be extended to assessee, duty demand confirmed on alleged clandestine removal is not sustainable: CESTAT
 
ST - Rolling Stocks are plant as well as machinery and are to be brought into operation by applicant, meaning 'commissioning' - applicant satisfies condition of providing services by way of commissioning of original work - since said services are pertaining to metro, exemption available under notfn. 25/2012-ST: AAR

By TIOL News Service:

NEW DELHI, MAY 11, 2016: HYUNDAI Rotem Company has filed following two applications before the AAR raising the following question in respect of service tax liability in the matter of contract entered into with Delhi Metro Rail Corporation and with respect to Hyderabad Metro Project with L&T Metro Rail Hyderabad Limited .

Whether the applicant is eligible for claiming exemption from payment of Service Tax in terms of Notification No. 25/2012 dated 20.06.2012 for the activities in relation to Testing & Commissioning, Integrated Testing & Commissioning and Trial runs of Trains to be undertaken under the Contract?

Applicant further submits that in terms of the meaning given to 'original works' in the exemption Notification No. 25/2012-ST dated 20.06.2012 read with the Explanation 1 in rule 2A of the Service Tax (Determination of Value) Rules, 2006, the exemption will be available to erection, commissioning or installation of plant, machinery or equipment pertaining to metro.They also rely on the decisions in CIT vs. Mir Mohammad Ali = 2002-TIOL-1516-SC-IT-LB , CIT v. TajMahal Hotel = 2002-TIOL-642-SC-IT to state that the Rolling Stocks, which are installed by the applicant will fall within the definition of 'plant', 'machinery' as well as 'equipment' and therefore, will be covered by said exemption Notification.

Revenue submitted that the services related to installation and commissioning of Rolling Stock will be exempt from Service Tax, if these are for original works pertaining to Railways, including Monorail and Metro.

The authority inter alia observed –

++ The applicant would be eligible to avail benefit of exemption Notification No. 25/2012-ST dated 20.06.2012, in case, services provided by the applicant are;

a) by way of construction, erection, commissioning or installation

b) of original work and

c) pertaining to railways, including monorail or metro.

++ The word 'Commissioning' has not been defined under the Finance Act, 1994. Therefore, one has to refer to its dictionary meaning. As mentioned above, "commission" means to bring a machine, plant, equipment etc., into operation. Rolling Stocks are plant as well as machinery, as held by the Hon'ble Supreme Court in CIT vs. Mir Mohammad Ali = 2002-TIOL-1516-SC-IT-LB and CIT vs. TajMahal Hotel = 2002-TIOL-642-SC-IT respectively. Further, these Rolling Stocks are to be brought into operation by the applicant, which would fall under the meaning of word "commissioning". Therefore, we agree with the applicant that the services provided i.e. in relation to testing & commissioning, integrated testing and commissioning, trial runs of trains, are by way of commissioning.

++ Second issue is whether services provided by the applicant pertain to the original work. As per paragraph 2(y) of Notification No. 25/2012-ST dated 20.06.2012, "original works" is the meaning, assigned to it in Rule 2A of the Service Tax (Determination of Value) Rules 2006, wherein "original work" inter-alia means erection, commissioning or installation of plant, machinery or equipment or structures, whether fabricated or otherwise. We have already held in preceding paragraph that Rolling stock is at least plant and machinery and same would be commissioned by the applicant. Therefore, the applicant would satisfy this condition also i.e. providing services by way of commissioning of original work.

++ Third condition relates to providing said services pertaining to railways, including monorail or metro. This condition has not been opposed by the Revenue, as it is evident that the services relate to Delhi Metro Rail Corporation and L&T Metro Rail Hyderabad Limited.

Ruling:

Applicant is eligible for claiming exemption from payment of Service Tax in terms of Notification No. 25/2012-ST dated 20.06.2012 for the activities in relation to Testing & Commissioning, Integrated Testing & Commissioning and Trial runs of Trains to be undertaken under the contract.

In passing : Amending notification 9/2016-ST dated 01.03.2016 relating to –

Entry 14. Services by way of construction, erection, commissioning, or installation of original works pertaining to,-

(vi) in entry 14, with effect from 1st March, 2016,

A. for item (a), the following shall be substituted, namely:-

“(a) railways, excluding monorail and metro;

Explanation.-The services by way of construction, erection, commissioning or installation of original works pertaining to monorail or metro, where contracts were entered into before 1st March, 2016, on which appropriate stamp duty, was paid, shall remain exempt.”.

(See 2016-TIOL-13-ARA-ST)


POST YOUR COMMENTS
   

TIOL Tube Latest

TIOL Tube
Shri N K Singh, recipient of TIOL FISCAL HERITAGE AWARD 2023, delivering his acceptance speech at Fiscal Awards event held on April 6, 2024 at Taj Mahal Hotel, New Delhi.

TOP NEWS

AR not Afar by SK Rahman

VISION 360



Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.

TII LATEST

TIOLCORPLAWS LATEST