Service tax in sub contract

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Querist : Anonymous

Querist : Anonymous (Querist)

03 February 2010 Please tell about service tax in sub contract.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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03 February 2010 Let me know what service you are doing as sub contractor

Querist : Anonymous

Querist : Anonymous (Querist)

04 February 2010 AS A SUB CONTRACTOR WE ARE ENGAGED IN BUSINESS OF EXCAVATION AND CRUSHING OF STONE AND MINERALS

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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24 July 2025 Thanks for the details! Here’s the **service tax treatment for subcontractors in excavation and crushing of stone and minerals**:

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### 1. Classification of Service

* Excavation and crushing of stone and minerals fall under the category of **"Construction and Engineering Services"** or **"Support Services"** depending on exact nature.
* However, since this is about mining-related activities, it often comes under **Mining and Mineral Services** or **Works Contract Services**, depending on the contract.

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### 2. Applicability of Service Tax

* **If you are subcontracted for excavation and crushing**, this is considered a **taxable service** under service tax law (before GST regime).
* Subcontractors are liable to pay service tax on the value of services rendered.

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### 3. Valuation & Payment

* The value of service is the amount charged to the main contractor.
* The subcontractor needs to pay service tax on the amount invoiced for excavation and crushing.

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### 4. Reverse Charge Mechanism (RCM)

* In some cases, the main contractor might be liable to pay service tax on subcontractor services under **reverse charge mechanism** (e.g., works contract services where the contractor pays tax on behalf of subcontractor).
* This depends on notification and whether subcontracting falls under notified services.

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### 5. Recommendations

* Check the exact nature of contract & services under applicable service tax notifications.
* Ensure registration under service tax.
* Pay service tax monthly or quarterly as applicable.
* Maintain proper invoices and records.

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### Summary

| Point | Explanation |
| -------------- | ---------------------------------------------- |
| Service type | Excavation & crushing = taxable service |
| Liability | Subcontractor pays service tax (usually) |
| Reverse Charge | May apply if notified under rules |
| Registration | Required if taxable turnover exceeds threshold |

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If you want, I can help you find exact applicable notifications or draft a tax calculation for your subcontracting services. Interested?

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