levy of service tax on work contract

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 December 2010 My clients who are work contractor and providing services of civil work & electrical work to govt departments & semi g ovt departments and not paid any service tax on any services provided by them. now they are getting the notices from service tax departments, now what is the remedies availiable for work contractor to prevent the service tax.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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16 December 2010 He can only claim input service tax credit or if his receipt is less than exemted limit. Otherwise tax is payable.

A.Deepa

A.Deepa (Expert)
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16 December 2010 Service tax is payable on receipt basis. Check whether the service value received for the year in which notice has been received exceeded the exemption limit. If it has not crossed exemption limit, then service tax is not payable. (Check the exemption limit for the relevant year for which notice has been given). If it exceeds exemption limit, service tax is payable on the works contract service. However it is payable after claiming input credit of service tax on the service bill paid & excise duty on the material bill paid.

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