Expressing concern on notices issued to over a hundred contractors for service tax liabilities on tube wells construction, Rajasthan Chief Minister Vasundhara Raje has urged the Centre to clarify that the said work are under exemption.
In a letter to Union Finance Minister Arun Jaitley, she said notices have been issued by field officers under Central Excise Commissioner, Jodhpur region, to the contractors who have been awarded work orders by Public Health and Engineering Department for tube well construction and related activities.
PHED officials have also been sent letters by Central Excise asking them to provide lists of service providers.
Raje said issue of notices have resulted in serious "consternation" among the contractors.
She said levying service tax on an essential state government function would simply mean a transfer of lumpsum funds from the state kitty to the Centre which will "affect the financial management of the state exchequer".
She requested Jaitley that a clarificatory notification be issued at the earliest applied with retrospective effect, unambiguously stating that boring/construction of tube wells etc. Are covered under the exemption under clause 12 and 25 and the various activities such as construction, erection, installation mentioned in the 2012 notification issued by Ministry of Finance are only "indicative", a release said.
