Works contract

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Dipak (Querist)
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07 January 2017 If a listed Company get a works contract from government than that will be exempt.but if company provide some works to more than one sub contractors. Is this Situation will be cover under MEN Entry no 29(h) and Exempt from service tax?
if Yes Pls Give the Reference of some case law which are applicable in same situation.....

CA Suresh Jain

CA Suresh Jain (Expert)
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07 January 2017 The entry 29 h itself is clear beyond any doubt that exemption is granted to sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt

Dipak

Dipak (Querist)
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07 January 2017 can you pls tell me any case laws in which a company tack the service of more then one sub contractors and they are also covered in entry 29h?

Aashok Kumar Sharma online

Aashok Kumar Sharma

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03 August 2025 You're referring to Mega Exemption Notification No. 25/2012-ST, specifically Entry 29(h), which was in force during the pre-GST Service Tax regime.
Let's first explain the provision, and then address your query about case law reference for listed companies hiring multiple sub-contractors for exempt works contracts from the government.

🔍 What is Entry 29(h) of Notification 25/2012-ST?
Exemption under Entry 29(h):
"Services provided by a sub-contractor to the main contractor providing works contract services which are exempt under this notification" shall be exempt from Service Tax.
This entry ensures that if the main contractor's work is exempt, then the sub-contractor’s services are also exempt — as long as they are in relation to that exempt works contract.
✅ Your Situation:
A listed company (say, Company A) gets a works contract from the government (likely exempt under Entry 12 or 12A).
Company A hires multiple sub-contractors (B1, B2, etc.) to carry out portions of that exempt works contract.
You're asking whether the sub-contractors' services to the company are also exempt under Entry 29(h), even if multiple are appointed.
✅ Answer: YES, Entry 29(h) applies — Even with multiple sub-contractors
The number of sub-contractors does not affect the exemption, as long as:
They are providing works contract services
To a main contractor whose work is exempt
This includes private companies, listed companies, etc., as long as the main works contract is exempt (e.g., with government).
So if Company A’s contract with the government is exempt under Entry 12/12A, then its sub-contractors are also exempt under Entry 29(h).
📚 Relevant Case Law References
While there are few direct judicial decisions specifically on “multiple sub-contractors under Entry 29(h)”, here are some applicable rulings and clarifications that support your case:
🧾 1. Lanco Infratech Ltd. vs. CCE, Hyderabad [2015 (40) STR 1061 (Tri. - Bang.)]
Held: If the main contractor's services are exempt, then sub-contractor’s services used to execute the same work are also not liable to service tax, even if they are separately contracted.
✅ Relevance: Sub-contractors to an exempt main contractor are covered under Entry 29(h)
🧾 2. URC Construction (P) Ltd. vs. CCE, Salem [2015 (39) STR 193 (Tri. - Chennai)]
Held: Services provided by a sub-contractor to a main contractor performing exempt works contract for a government authority are also exempt under Entry 29(h)
🧾 3. Clarification in CBEC Education Guide (2012), Para 6.2.1
"If the services provided by a main contractor are exempt, then services provided by sub-contractors are also exempt under entry 29(h)..."
✅ Confirms legislative intent that this exemption flows down the contracting chain
✅ Final Conclusion:
Yes, multiple sub-contractors engaged by a listed company executing an exempt government works contract are also exempt under Entry 29(h).
You can rely on:
Lanco Infratech and URC Construction decisions
CBEC Education Guide clarification

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