Service receiver liability on input credit

Dear Sir / Madam,

We are pvt ltd company dealing with construction activities taking service tax input credit’s from the service providers bills who’s dealing contract activities with us. Now, my query follows.

  1. How we able to know that the contractor who has claimed tax on his bill is paid to govt or not.
  2. Shall we collect tax paid challan’s or returns from them for records?
  3. Or shall we collect declaration with regards to the sum he has paid to government.
  4. What are the liabilities if someone take input credit for the service received from the provider.

Kindly guide us for better clarification in this regard.

Replies (3)

Dear Sir / Madam,

Please give advice on this.

AS long as the service provider is genuine and amount ispaid on valid invoice- one need not examine whether ST paid by him. There is a presumption that tax would have been paid. If not paid then dept to take actiuon against the defaulter.

Sir,

Thanks for your advice.

If, we came to know that some of the contractors has not paid service tax to govt. then what we should do?

In practical everyone is not paying the amount to govt. Hence, how the impact will come incase of taking of input tax credit.

Kindly guide on this.

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