Sub-contractor providing service by way of works contract

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P.Harish (Querist)
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31 August 2016 Respected Expert,

Kindly enlighten into it & advise in brief with reference,
Notification no 25/2012 ST dt 20.6.112
Point no 29 :- Services by the following persons in respective capacities
(h) sub-contractor providing services by way of works Contract to another contractor providing works contract service which are exempt.
Now, We ( P Ltd co) have an order of Works Contract form A .Ltd. we have offload entire job to sub-contractor to execute the job. We will discharge Ser tax on 40% value of the Conct. in this case can our sub- contractor charge Service under WCT in the Invoice or It will be exempted.

Please elaborate with circular if any

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 September 2016 That provision is applicable only when when exempted works contract are executed by sub contractor.
In this case when main contractor is paying service tax sub contractor is also liable for service tax. Main contractor can claim input tax credit on service tax paid by sub contractor.

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