Service TAx on Sub contractors

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CA Rohin Arora (Querist)
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28 December 2009 i would like to know whether Service Tax is liable to be charged by the Subcontractor on services provided to the pricncipal contractor in case the service tax is exempt on the services provided by the main contractor...as per circular no. 999.03/28.03.2007 the sub contractor is liable to charge service tax and main contractor will take input credit of it.but my confusion stands in case of exempted services because the service exempt to main contractor should be exempt to sub contractor also....

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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28 December 2009 TDS is liable if gross receipt cross 10L in any F.Y.

BALU V

BALU V (Expert)
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29 December 2009 You are right. When the services rendered by the principal contractor is exempted naturally the services rendered by the sub-contractor is will also follow the suit. There is only one remote possibility. The main contractor may be under the thresh hold exemption. But the sub-contractor may be under the tax net. In such a situation the subcontractor is liable whereas the main contractor is not.

CA Rohin Arora

CA Rohin Arora (Querist)
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29 December 2009 Mr. Murtaza.I m asking you about service TAx and not TDS....

Kishanlal Paliwal

Kishanlal Paliwal (Expert)
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02 January 2010 Liability to taxed under ST Laws depends on taxable limit i.e. 10 Lac in any Financial Year.

Sub contractor is liable for Service Tax even if main contractor is not fatched the threshold limit.

Regards

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