Applicability of service tax on exempted services

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VIJAY SHARMA

ARTICAL SHIP TRAINING

25 Points Posted on 07 March 2011

Dear Friend,

I wann to check weather service tax is applicable on sub-contractor.I have an doubt becouse for similar type of work main contractor does not charges any service tax.on his bill raised by him on ultimate party.For eg. There is an Co.A issues tender(work related to natural gas distribution i:e laying and instullation work in states like Delhi,Noida,Gujrat etc) and allote work to Co. B .But Co. B.Further sub let the work to Co. C.Now when Co. A Makes Payment to Co. B it does not make any payment of service tax.As it charges only WCT @ 2.5% .My doubt is if this work is done by Co.C (Sub contractor) wether or not it should chrg service tax.

Replies (4)

Pankaj Arora

Learner

3431 Points Posted on 07 March 2011

service tax is also applicable to sub-contractor… service tax not charged by main contractor because gross receipt of service render by him does not crossed to 10Lac. Company B is charging right because Co. A given a contract to Co. B and that’s why Co. B is liable for charge WCT.

VIJAY SHARMA

ARTICAL SHIP TRAINING

25 Points Posted on 07 March 2011

Originally posted by : Pankaj Arora

Thanks,For ur intrest bt,my doubt is not still clear.As u said services has not crossed Rs.10lac. it was correct. But here services recevied or more than Rs.10lac.and the bill raised by Co. B on Co. A are without service tax.