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Service tax on pvt road construction

Ritesh Jain (CA, CS in Job) (675 Points)

10 July 2014

Dear CCI'ans,

Good morning,

I am a líl bit confused about road construction exemption if road is inside a private colony or colony maintained by a company. As per mega exemption notification:-

Services provided by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of,-

a road, bridge, tunnel, or terminal for road transportation for use by general public;

What does that ''use by general public' mean. ?

Whether a road inside a colony maintained by company and constructed by company will be eligible for exempion..??

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4 Replies

Venkatanarayana GM (Partner associate at Hiregange & Associates) (1279 Points)
Replied 10 July 2014

Dear Ritesh,

The road constructed within the layout is not only meant for the purchsers of sites alone , it is also open for public so, this exemption should be provided.

secondly, the land development authority (Govt authority) will not allow to form layout without creating such facilities , hence this exemption should be eligible . but it is unfortunate that departmental offiers are not accepting this view.

Thanks

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Ritesh Jain (CA, CS in Job) (675 Points)
Replied 15 July 2014

Dear Venkat,

Agreed with your view.

Suppose in the layout the boards of 'This is a private road' are made as well as the construction, repair and maintainence of the total area is under company. Muncipality could not intervene in layout. in any way.

Vikas (CA) (1135 Points)
Replied 16 July 2014

I believe such a road should not be considered to be a road' used by general public' as these roads are generally used by the colonies, and are constructed for this specific purpose only. If the society wants such roads to be prevented from being used by the general public or tress passers, then they can do so.

Hence, exemption in such case, in my opinon, should not be extended.