Works contract service – ongoing projects – Delhi High Court issues notice
The controversial CBEC Circular No. 98/4.1.2008 in which the Board had clarified that the assessees who have classified their service under other category of taxable service ‘Commissioning or Installation Services’, ‘Commercial or Industrial Construction Services’ and ‘Construction of Residential Complex Services’ and paid the service tax accordingly prior to 01.06.2007, shall not be entitled to pay the tax under the ‘works contract services’, had drawn a lot of critical comments from our enlightened contributors.
The unanimous opinion was that the Board was patently wrong.
The issue came up before the Delhi High Court yesterday and the High Court issued notice to the Government and the matter is to come up again for hearing on 26th March 2008.
Instead of cutting a sorry figure before the High Court, the CBEC should consider withdrawing the controversial circular and tell the High Court that the circular has been withdrawn.