Service tax on bonus/exgratia paid to contractor


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Querist : Anonymous

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Querist : Anonymous (Querist)
24 January 2011 The Company X given contruct for construction of residential complex to contractor i.e. Y. The contractor is charging service tax in accordance with Works contract service. The Company X is happy with performance of contractor Y and paid a sum in the form of bonus/exgratia. Whether this bonus/exgratia will cover under service tax or not ?

24 January 2011 If bonus exgratia is paid as per the term of contract service tax is payable.


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