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Case Law Details

Case Name : Smp Constructions Pvt Ltd Vs C.C.E. & S.T (CESTAT Ahmedabad)
Appeal Number : Service Tax Appeal No. 11649 of 2013- DB
Date of Judgement/Order : 21/06/2023
Related Assessment Year :
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Smp Constructions Pvt Ltd Vs C.C.E. & S.T (CESTAT Ahmedabad)

Introduction: In a significant ruling by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Ahmedabad, it has been established that the cost of material provided by the service recipient must be included in the gross value of construction service for availing abatement under Notification No. 01/2006-ST. The ruling was made in the case of Smp Constructions Pvt Ltd Vs C.C.E. & S.T.

Analysis: The key issue in this case revolved around whether the value of the material supplied for free by the service recipient should be added to the gross value of the construction service for the purpose of availing abatement under the service tax. The tribunal decided in favor of the appellant, following precedents set in their own previous case as well as the larger bench decision upheld by the Supreme Court in the case of M/S Bhayana Builders Pvt. Ltd. This verdict emphasizes the importance of considering the value of free supply materials in the gross value of a service, thereby ensuring the right application of abatement under service tax.

Conclusion: The CESTAT Ahmedabad’s decision reaffirms the need to consider all aspects of service value, including materials supplied free of cost by the service recipient, for the application of tax abatement.

FULL TEXT OF THE CESTAT AHMEDABAD ORDER

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