CESTAT Allahabad set aside a ₹7.24 crore service tax demand on a contractor, allowing exemptions for government irrigation, road and renovation works and holding the extended period unavailable.

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, has set aside a service tax demand of ₹7,24,12,305 for April 2016 to June 2017. It held most of the contractor’s government works exempt under Notification No. 25/2012-ST and the entire demand time-barred [G.S. Express Pvt. Ltd. & Ors. v. Pr. Commissioner, CGST & Central Excise, Lucknow, 2026-juristway.com-3338-CESTAT(Allahabad)-ST].

The Bench of P.K. Choudhary, Member (Judicial), and K. Anpazhakan, Member (Technical), heard the appeals of the company and its director; the order was written by Mr. Choudhary. The Principal Commissioner’s order dated 1 Mar 2024 had confirmed about ₹4.48 crore under forward charge and ₹2.76 crore under reverse charge, with penalties.

On merits, the Tribunal held exempt a pakka ghat built on the Yamuna to prevent erosion, as irrigation work under Entry 12(d); a concrete pathway and parking on the Gomti riverfront and the internal roads of a large housing scheme in Lucknow, as roads for use by the general public under Entry 13(a); and interior renovation of the Kanpur Development Authority’s office, as repair of a civil structure under Entry 12A(a).

Under reverse charge, the Tribunal held that freight included in suppliers’ invoices and loading charges were not goods transport agency services. Fees to chartered accountants, company secretaries and architects were not legal services. Daily labour and sub-contract payments could not be taxed on the assumption that they were manpower supply or works contracts. Royalty deductions by departments were not shown to be services by the Government.

On a medical college at Basti, the exemption had been withdrawn from 1 Mar 2015, and the Larger Bench in Melange Developers Pvt. Ltd. had held against sub-contractors. Given the conflicting decisions, however, the extended period was not available.

On limitation, the show cause notice (SCN) was issued on 8 Oct 2021 for April 2016 to June 2017. The Tribunal held that the issues were interpretational, the appellant regularly filed ST-3 returns, and all data came from its own books. It followed International Merchandising Company (2022) and held the entire demand time-barred. The penalties on the company and on Sandeep Anand were set aside, and both appeals were allowed.

2026-juristway.com-3338-CESTAT(Allahabad)-ST