Service Tax - Structures also eligible for abatement

By Vijay Kumar

In this year’s budget the scope of erection and Commissioning service was expanded to include structures. The definition now reads,

“erection, commissioning or installation” means any service provided by a commissioning and installation agency, in relation to,—

(i) erection, commissioning or installation of plant, machinery, equipment or structures, whether prefabricated or otherwise; or ……………….

Sl. No. 5 of the table to the Notification No. 1/2006-Service Tax, dated the 1^st March, 2006 allowed abatement of 67% of the tax on Erection, commissioning or installation of plant, machinery or equipment. But here structures was not included. This omission is now made good. But then this does not have retrospective effect. What about the structures installed prior to May 23^rd? Are they not eligible for the abatement? DDT also pleads guilty in not pointing this out earlier.

Notification. No. 21/2006-Service Tax dated 23^rd May, 2006