Hello,
I am into a business which involves lot of earth work. I had employed a contractor to do a part of work and had paid him accordingly. I also deducted TDS on his payments and gave him TDS certificates. Now if he doesnt pay service tax, will I have any responsiblity of the same. As per my understanding my obligation is only till TDS and service tax is his responsibility as service provider. Please advise on same,
Regards,
k.s.reddy
Under the reverse charge system recipient will pay the service tax on work contract services on the value of 50% under Notification No. 30/2012-ST.
If the sevice is excavation of earth then it is purely labour job, not in works contract. if the labour/s engaged in earthwork under direct control & supervision of your contrctor i.e you pay bill your contyractor under quantity basis then it 's fail under Business Auxiliary service and service tax payment liability will be fail under the scope of your contractor but when the labours works under your control & supervision i.e you pay your contractor under daily head basis then it will fail under Manpower Supply Service & 75% of total service tax liability will be fail on your scope of liability.
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