Dear Sir,
Our company A ltd is working as a Principal contractor for construction work given by xyz ltd and we have appointed another co.( B ltd ) as subcontractor.
A & B are registered under composition scheme .
Query- B ltd raise invoice to A ltd and charge service tax under composition scheme and A ltd means principal contractor raise invoice to XYZ ltd and charge service tax
At the time of payment of service tax can A ltd take credit of service tax which he has paid to B ltd . because under composition scheme we can not
Take credit on INPUTS but can take credit for input services & capital goods.
Work contract services are covered under input services or not.
Also suggest what happen if B ltd not registered under composition scheme .
Is there any change if A ltd do agreement with XYZ ltd that they will charge on actual cost ( not profit ) as a reimbursement of expenses. In this case A ltd have no need to
Charge service tax from xyz ltd ? Because no service charge , no profit .
Plz give your reply according current budget .
Thanks & regards
Jitendra
CAclubindia
