Applicability of service tax in back to back railway contrac

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2010 Clarification on following issues related to applicability of Service Tax is requested:
1. The Querist Company undertakes contracts from Indian Railways for laying & linking of Railway Tracks, Deep Screening, Gauge Conversion etc where all materials excluding ballast are provided by the Indian Railways. So far Indian Railways has not charged Service Tax. The Querist Company outsources the job to sub-contractors on same terms and conditions. The following queries may kindly be clarified:
a. Whether the sub-contractor is liable to pay Service Tax?
b. In case Sub-contractor is to pay the Service Tax, will it be ultimate responsibility of the Querist Company?
c. Will the Contract attract Service Tax, if a similar contract is awarded to the Querist Company by a Company in Private Sector?

Kindly clarify.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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26 October 2010 railway is not a service provider, so railway does not charge the service tax.

In case of works contract, and service provided to railway, is exempted under the service tax.

Sub - contractor is doing the same job so he will also get the exemption.

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