Service tax exemption

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Meeta Nagar

Director

24 Points Posted on 01 October 2013

We had provided Service in the field of Automation to a EPC contractor for the project at Terimnal-3 at Delhi Airport. We were provided with purchase order mentioning that this service is exempted from service tax U/S 65(105) ZZZZA (Airport). However, during service tax audit objections were raised by auditor claiming that these services are not exempted under this section & service tax has to be deposited for all the invoices raised by us on our contractor. We contacted the contractor & it says that as per them exemption is valid & they will not pay us the service tax.

Our query is under the above scenario, who is responsible to pay the service tax. If the contractor does not pay us are we still liable to pay to service tax department.

Replies (3)

CA Vivek Goyal

Practising CA

135 Points Posted on 01 October 2013

Dear Meeta, Please clarify further which type of services you are providing under EPC services. Please tell some kind of works under this.

Meeta Nagar

Director

24 Points Posted on 01 October 2013

We supplied manpower on monthly basis for software development & commissioning of automation systems. This service is covered under information technology software service.

CA Vivek Goyal

Practising CA

135 Points Posted on 02 October 2013

Dear Meeta, Your services was not exempted u/s 65 (105) ZZZZA earlier because works contract services provided in relation to airport was not taxable service before 01-07-2012 under this section but you are providing services under Manpower Recruitment Services so you are liable to pay Service Tax. In todays scenario RCM is also applicable on manpower services. In old bills you are to pay service tax out of your own pocket by assuming that service tax amount was included in gross amount which you had received earlier.