Service tax on outsourced work

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Hi,

This query is regarding double taxation on the the same work and need your assistance. The problem is as described below.

Lets say company A got a work order for 1 lakh for some software development and it directly outsourced the entire work to company B for Rs. 80K, now while raising invoices, company A raises an invoice for 1 lakh with service tax on it to the client and company B raises an invoice for 80K with service tax to company A.

Now in this senario, would like to know whether company A can reduce the service tax liability on 1 lakh to only Rs. 20 K where it already paid for 80K to company B.

(Will this come under input service credit kind of thing)

Thanks in advance.

 

Replies (1)

A can eligible to take service tax input if he registered, Even adjusted ( 80000*12.36%) - ( 100000*12.36%) balance to be paid by A

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