Service tax on services provided by a contractor

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SATISH KUMAR (Querist)
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14 August 2012 HELLO
MY DEAR FRIENDS
CAN ANY BODY HELP ME IN RESOLVING THE FOLLOWING ISSUE:-

ONE OF MY CLIENT IS A PARTNERSHIP FIRM ENGAGED IN RICE SHELLING BUSINESS. MOST OF PRODUCTION JOBS ARE ON CONTRACT BASIS (e.g. stitiching bags, loading and unloading, feeding of paddy etc.) WHERE ONE CONTRACTOR RAISES THE JOB WORK BILL. NOW AS PER THE LATEST AMENDEMENT IN SERVICE TAX PROVISIONS CAN MY CLIENT IS LIABLE TO PAY SERVICE TAX. MY CLIENT IS ALREADY REGISTERED WITH S.TAX DEPARTMENT WITH THE SERVICE" TRANSPORT OF GOODS BY ROAD,AS A CONSIGNEE". WHERE IT WAS NOT LIABLE TO PAY SERVICE TAX AS MOST OF AGRICULTURE PROUCTS ARE EXEMPTED FROM SERVICE TAX LIABILITY.

THANKS IN ADVANCE

Amol S Joglekar

Amol S Joglekar (Expert)
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14 August 2012 The contractor is supposed to charge service tax in his bills including 'running account' bills. If the contractor does not charge, 50% of the service tax liability shall be recoverable by service tax department from your client under notification no.30 (Reverse charge)

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