Case Law Details
Commissioner Vs Shapoorji Paloonji And Company Pvt Ltd. And Ors. (Supreme Court of India)
In a recent landmark judgment, the Supreme Court of India, in the case of Commissioner, Customs Central Excise and Service Tax, Patna v. M/s. Shapoorji Paloonji and Company Pvt. Ltd. & Ors., [Civil Appeal No. 3991-3992/2023 dated October 13, 2023], has set a significant precedent. The verdict clarifies that Service Tax is not applicable to services provided to Governmental Authorities, offering relief to numerous businesses and institutions that engage with such entities.
Hon’ble Supreme Court allowed the appeal and held that Service Tax is not leviable on the services provided to the Governmental Authority which includes an authority or board or any other body set up by an Act of Parliament or State Legislature; or established by Government with 90 per cent or more participation through equity or control to carry out any function entrusted to the municipality.
Facts:
M/s. Shapoorji Pallonji and Company Pvt. Ltd. (“the Respondent”) is engaged, in the business of providing construction services. The Respondent was awarded the contract for construction works from NBCC India Ltd. (“NBCC”), appointed as Project Management Consultant by IIT Patna vide Letter of Award dated December 20, 2012, for a total contract price of Rs. 167,70,09,043/-. As per the Letter of Award, the rates mentioned do not include Service Tax and the Respondent would be reimbursed for the Service Tax paid by IIT Patna. Similarly, vide order dated February 22, 2013, NIT Rourkela awarded a works contract for the construction project in campus for Rs. 302,82,39,866/-.
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