Service Tax - EPC Contracts for State Irrigation Projects - Taxable under WCS? AP HC Grants Stay
IN a landmark decision, the Bangalore CESTAT had held that the EPC contracts for State Irrigation Projects were taxable under "works contract" defined under Section 65(105)(zzzza) of the Finance Act, 1994 inasmuch as (i) transfer of property in goods was involved in the transaction and VAT was paid on such goods, (ii) the contracts were for the purpose of carrying out irrigation projects of the Government through turnkey/EPC mode, and (iii) none of the contracts was in the excluded category of works contracts. (2012-TIOL-613-CESTAT-BANG)
The Andhra Pradesh High Court has granted interim stay in the appeal filed by one of the parties.