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Reverse tax on sub contractors without registration

This query is : Resolved 
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(Querist)
16 November 2016 Hello,
Our company is a construction company. We have sub-Contractors without Service Tax Registration. They are below the 10 Lakh limit. Is reverse tax payable on these services???? if yes in what rate???? Please Explain
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
16 November 2016 Yes reverse charge applicable. The company is liable to pay 50% of service tax under reverse charge (50% of service tax at 15% on 40% value of contract in case of original works).
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Bernard

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Bernard (Querist)
16 November 2016 But the sub-contract include only labour and no material. in cases like this CERA audit team said need not to remit reverse tax if contract is only labour and no material
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
16 November 2016 As you will be supplying the material it will fall under works contract. Payment for the work will be based on quantum of work done not on quantum of labour supplied.
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