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Payment to sub contractor

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This query is : Open

CA Sudeep Singh (Querist)

03 July 2021 An assessee had received services from a firm and part of the services was sub contracted to another firm by the firm to whom assessee had initially given the contract. Now the sub contractor is willing to get the payment from the assessee.
I want to know whether it is possible to do so?
Since bill will come from the first firm to the assessee.

Deepa B

Deepa B (Expert)

03 July 2021 I assume that there are no terms mentioned in the initial contract permitting dealing directly with the sub-contractor. As there is no contract between assessee and the sub contractor, assessee is not liable to pay them. If contractor is bypassed, it might lead to dispute. Hence better to deal with only Contractor. It's contractor obligation to deal with the sub-contractor, because he has an agreement with sub-contractor.
Else obtain written consent from the contractor to the effect and then proceed.

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