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How to save skin from st liability

Queries 304 views 6 replies

We are an AOP (Service receiver)

Our contractor (Service provider) is providing construction service to us.

RCM not applicable.Contractor is also not charging service tax.

 

Is there any risk of penalty / interst / bearing ST Liability on us?

Replies (6)

Has chargable service portion exceeded 10 lakhs? If yes, inform contractor about his liability.

Thanks for the response sir.

Intimated to contractor on crossing 10L.As he doesnt want himself to be registered under ST, he is not charging ST

We are in fear that ST Dept will make us responsible for paying ST, as our contractor has not charged us.

So, we are thinking of obtaining a declaration from contractor, that he is only responsible, in case of future action by department, if any.

Does that declaration will be  handy to save our skin?

As such your liability would arise only in case of RCM. You cannot be penalize for any default of contractor, but try to convince him about the liability and penalties in case of such default. You may take & keep any such declaration with his PAN and address, which may help you in case of any query. 

Thanks once again sir.

I am in search of a format /wordings that to be incorporated in letter (declaration from contractor).

Request you to suggest the wordings to be incorporated.

If you have / come across any such wordings or letter format, request you to share with me...

 

You officially write a letter, with the contract agreement/reference no., where in you mention that he is liable to charge ST as the limit of SSP has been crossed. Clarify about your willingness to pay such levies as and when asked, but its not your resposibility/liability, in any case.

Keep a signed copy. See his response.

ok sir..thanks


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