Service tax in case of sub-contractor

Queries 1098 views 2 replies

CA Manoj G. Barvadiya

Profession

30 Points Joined December 2008

Dear Friends,

Facts:

Our client (Actual Service provider) is providing service to the Government agencies which are in the nature of Industrial or commercial construction service and residential complex service which are exempt from service Tax.

However in order to provide those service, our client has approached sub-contractor to provide the same. But the sub-contractor levies service tax on the amount of service provided by him.

Question:

Is there any circular or notification in force which exempt our client from paying service tax on the value of service received by him as input services ?

Also, if possibe please provide with the clarification on the above matter is no circuular or notification exists.

Thanks and regards

Manoj

Replies (2)

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

no such circular exist to exempt the contractor or sub contractor to get exemption from works contract on behalf of govt agencies, unless the govt agency provides any document with specific details of exemption , service tax is leviable.

Madhukar N Hiregange

Chartered Accountant

39039 Points Joined September 2008

The classification of the activity of the SC is important. If the service is one which is for the govt agency and is not in the course of industry or commerece, then even the SC wouldnot be liable.

However where the services provided by the SC is different from that of the main contractors service togovt, the SC wouldhave to charge the ST in my opinion.