Increased service tax rate under composition not affect pending contracts

Larsen & Toubro Limited Vs Assistant Commissioner (Calcutta High Court) Calcutta High Court held that the rates of tax as increased would be prospective and shall not affect the pending contracts and therefore would be entitled to the compounded rate of tax at 2% for the relevant period. Facts- The appellant entered into several works contracts during the year 2006-2007 on turnkey basis. After coming into the force of the Works Contract (Composition Scheme) for Payment of Service Tax Rules, 2007, the appellant exercised the option under the scheme and paid service tax at 2%. The appellant ...