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When does service tax liability arise for a contractor

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This query is : Resolved

Pinkal Kumar (Querist)

06 February 2016 A is a main contractor and he assigns a part of the contract to B (Sub-Contractor). B (Sub-contractor) raises a bill of Rs 50 Lac in May, 15 which is passed by A (Main Contractor) in the m/o Sept, 15. Query is:

"When does service tax liability arise for B, either in May, 15 when bill is raised by B or at the time of passing of bill in Sept, 15 by A. "

Also provide any case law, section, rule and proviso to substantiate the answer.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

06 February 2016 From 01st April 2012, all the individuals and partnership firm (including LLPs) serviceproviders whose turnover is Rs.50 lakh or less in the previous financial year, have an option to pay service tax on receipt basis upto Rs.50 Lakhs taxable value. Beyond 50 lakhs, service tax will have to be paid on the accrual basis on the basis of issue of invoice.

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