My company is real estate developers and constructing a residential project in Haryana. Company has given a civil contract to XYZ Company of Rs.123 with composite method of service tax 4.12% and company is also providing steel and cement free of cost to XYZ Company for construction activity. Now my query is as per amendment of service tax which has been implemented with effect from July 2009. If company provides material free of cost to contractor for construction activity is also liable to pay service tax on material value in composite scheme method. Who is prime responsible to pay service tax on material value, contractor or principal employer.
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