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Service provided by sub contractor to main contractor

Aditya Sharma (finance advisory) (377 Points)

31 December 2016

WORK CONTRACT SERVICE IS TAXABLE UNDER SERVICE TAX.

SUPPOSE A WORK CONTRACT ( CONSTRUCTION OF BUILDING) (BY A BUILDER) IS SUB-CONTRACTED TO A SUB - CONTRACTOR.

THAN WHO IS LIABLE TO PAY S.T. ??---THE BUILDER OR THE SUB - CONTRACTOR??

(IT IS A WORK CONTRACT AS IT INCLUDED SUPPLY OF MATERIAL + SERVICES.)

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4 Replies

VIKASH SINGH (ARTICLE) (92 Points)
Replied 31 December 2016

Both are liable for Sevice Tax and service tax charged by main contractor is eligible for Cenvat to sub contractor

Mukesh Kumar (Accounts Manager) (1466 Points)
Replied 04 January 2017

BOTH ARE LIABLIE TO PAY SERVICE TAX AND VAT AS PER THEIR WORK DONE VALUE, AND ALSO AVAIL TO CENVAT CREDIT OF INPUT SERVICE TAX AND VAT

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 04 January 2017

If sub contractor is only a labour contractor then over the Rs. 10 Lakhs limit if eligible liable to pay ST.

In other cases where the SC is a wct then liable beyond small service exemption limit ofRs. Laksh. 50% liability if individual, firm etc. Balnace 50% payable by the contractor.

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 04 January 2017

If sub contractor is only a labour contractor then over the Rs. 10 Lakhs limit if eligible liable to pay ST.

In other cases where the SC is a wct then liable beyond small service exemption limit ofRs. Laksh. 50% liability if individual, firm etc. Balnace 50% payable by the contractor.