SITE PREPARATION
Date of Introduction: 16.06.2005 vide Notification NO.15/2005 dated 07.06.2005
Definitions:
“site formation and clearance, excavation and earthmoving and demolition” includes,
(i) drilling, boring and core extraction services for construction, geophysical,geological or similar purposes; or
(ii) soil stabilization; or
(iii) horizontal drilling for the passage of cables or drain pipes; or
(iv) land
reclamation work; or
(v) contaminated top soil stripping work; or
vi) demolition and wrecking of building, structure or road,but does
not include such services provided in relation to agriculture, irrigation,
watershed development and drilling, digging, repairing, renovating or restoring
of water sources or water bodies; (section 65(97a))
“taxable service” to any person, by any other person, in relation to site formation and clearance, excavation and earthmoving and demolition and such other similar activities; (section 65(105)(zzza))
Value of Taxable Service:
The value of taxable service shall be the gross amount charged by the service provider for providing such service and the money value of any other consideration ( if any) received for providing such service. The value of taxable service shall be determined as per the provisions made under section 67 of the Finance Act, read with Service Tax (Determination of Value ) Rules, 2006
Who is responsible to pay Service Tax:
The service provider is responsible to pay service tax. However, in cases, where the provider of taxable service is located outside India and the recipient of service is located in India, the recipient of service is responsible for payment of service tax. The responsibility to pay service tax under such situations is determined by the provisions made under section 66A of the Finance Act, 1994, read with Taxation of Services (Provided from outside India and received in India) Rules, 2006
Scope of Service:
Any service provided or to be provided to any person, by any other person, in relation to site formation and clearance, excavation and earthmoving and demolition and such other similar activities is leviable to service tax under sub-clause (zzza) of section 65(105) of the Finance Act, 1994. “Site formation and clearance, excavation and earthmoving and demolition” has been defined in clause (97a) of section 65 of the Finance Act, 1994.
The definition of site formation and clearance, excavation and earthmoving and demolition is an inclusive definition and the activities specifically mentioned are indicative and not exhaustive. Prior to construction of buildings, factory or any civil structure, activity of mining or laying of cables or pipes, preparation services of site formation and clearance, excavation and earthmoving or leveling are normally undertaken for a consideration to make the land suitable for such activities. Such services include blasting and rock removal work, clearance of undergrowth, drilling and boring, overburden removal and other development and preparation services of mineral properties and sites, and other similar excavating and earthmoving services. Demolition of structures, buildings, streets or highways is also undertaken for a consideration as a preparatory activity for subsequent construction activity or for clearing the site for any other purpose. All such activities fall within the scope of this service.
However, site formation and clearance, excavation and earthmoving and demolition services when provided in relation to agriculture, irrigation, watershed development and drilling, digging, repairing, renovating or restoring of water sources or water bodies are specifically excluded and not within the scope of this service.
(Ref: Board’s Circular No. F.No.B1/ 6 /2005-TRU dated 27.07.2005)
Service-specific Exemption:
Notification 17/2005-ST dated 07.06.2005 exempts this service provided in the course of construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, major and minor ports.
General Exemptions:
|
Sr.No. |
Notification No. |
Nature of exemption |
|
1 |
16/2002 |
Services provided to United nations or any International Organisation |
|
2 |
12/2003 |
Exemption to value of goods and material sold during the course of providing taxable service, subject to conditions laid down in the notification. |
|
3 |
4/2004 |
Service provided to a developer of Special Economic Zone or Unit located in SEZ |
|
4 |
6/2005 |
Exemption from service tax for taxable services upto gross value of Rs. 4 lakhs, in case of service providers whose gross turnover for the preceding financial year was less than Rs. 4 lakhs ( w.e.f 01.04.2005) |
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