Service tax on sub contracts

This query is : Resolved

balireddy (Querist)
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21 March 2015 Dear sir/Mam, A builder enters into agreement with prospective buyers to construct residential apartments.. and gave the same work to sub contractor to construct the apartment what is the tax implementation??? only main builder is liable for service tax or only sub contractor is liable r both of them r liable for service tax please clarify my doubt

CA Raman Singla

CA Raman Singla (Expert)
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22 March 2015 In this case, the sub contractors are to be treated as separate service providers and accordingly service tax is required to be paid both by the main contractor and the sub contractor. Further, the service tax paid by the sub contractor can be claimed as cenvat credit by the main service e provider.For further analysis and updations on Indirect taxation you can log in to our website www.indirecttaxprofessionals.com