Service tax on sub contractor

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2012 Hi friends,

I am working in a construction co. and sub contracting some of our work to some sub contractor.
We pay service tax on work provided by us and take input credit of service tax charged to us by sub contractor.

We receive payments / bills from our clients say on 10th may so liability to pay s.tax arises on 6th june. While we charge our sub contractor on 10th june.

Now as my liability to pay s.tax arises before i charge my sub contractor.
For eg. My co. will pay Rs. 100 s.tax on 6th june. And my co. will be charge s.tax by sub contractor on 10th june say Rs. 90. From above it is clear that my actual liability is Rs. 10 only (100-90) as Rs. 90 will be available as input credit.

Now my que. is:
Can we get refund of service tax paid my us, or there is any other mechanism exists. Please let me know what to do in above situation.
Can we transfer bal. in input credit of Rs. 90 (paid to sub contractor) in Service tax output account so our actual expense of s.tax comes to Rs. 10 only.

CA Suresh Jain

CA Suresh Jain (Expert)
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11 September 2012 In the month of June CENVAT credit will be available to set off and so on. In the last and final bill of contract you take the bill from subcontractor in the same month of raising your bill to the client and acvail CENVAT

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