Service tax on sub Contractors
Whether Service ta is payable by the subcontractor, where main contrctor is already paying it for the same category of services, and subcontrctor is not in any way linked with the customers????????????????
9 Replies
Late CA Sampat Jain
(Chartered Accountant)
(4772 Points)
Replied 15 September 2007
The main contractor, subject to fulfillment of conditions , will get input credit for service tax charged by subcontractor .This way ultimate service tax payble by conractor will not rise.
SAMEER
(CHARTERED ACCOUNTANT)
(304 Points)
Replied 15 September 2007
dear freind
Indore and pune commissionarates has issued Trade notices that no tax is levaible in such cases please refer book by Taxmann and page no 1289-1293 VOl. 2 of JK Mittal
Raghu
(-)
(27 Points)
Replied 15 October 2007
Subcontractor is required to pay service tax as per the latest master Circular No. 96/7/2007-ST dt.23.08.2007.
Hari Venkata Ramana
(M.Com, AICWA)
(124 Points)
Replied 10 April 2008
As per the recent judgement given by Bangalor bench in the case of Photo Flash vs. Commissioner of Customs .......... A sub contractor need not pay service tax if main contractor discharges the service tax liability. This is based on the logic that Government cannot levy tax twice on same service one on the main contractor and other on the sub contractor. However recently service tax department has given a clarification vide self quety no. 999.03/23.8.2007 stating that a sub contractor is liable for discharge service tax liability irrespective of main contractor discharges the same. However Input credit will be available to the main contract.
I am having a doubt whether this clarification is effective from 23.8.2007 onwards or with retrospective effect.
Can U please clarify my doubt.
hemant
(service)
(22 Points)
Replied 27 February 2009
| Originally posted by :Raghu | ||
| " |
Whether Service ta is payable by the subcontractor, where main contractor is already paying it for the same category of services, and subcontractor is not in any way linked with the customers please clarify with details.... |
" |
BeyondConsultants
(CA/CS/LLB(DU))
(184 Points)
Replied 27 February 2009
Service Tax is payable by Sub-Contractor. Main contractor will claim tax so paid as input credit and setoff it with out tax charged from client. This is law.
PARAS
(STUDENT)
(32 Points)
Replied 27 October 2010
| Originally posted by : BeyondConsultants | ||
 |
Service Tax is payable by Sub-Contractor. Main contractor will claim tax so paid as input credit and setoff it with out tax charged from client. This is law. |  |
Sir, hw come a service charged of service tax to the contractor, is charged again to the subcontractor, it leads to double taxation on the same service......and if the main contractor is providing services to the Railways, which are exempt from service tax, is the subcontractor liable for the same?????plz help along with the case laws......
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 28 October 2010
The case laws discussed are all prior to cenvat credit as also relying on circulars issued in this reagrd. WEF 23.8.2007 all those circulars have been withdrawn after issue of master circular wherein clearly they set out that sub contractor is liable and main contractor can avail the credit. Therefore after that date in 2007 SC liable.
vaibhav
(manager)
(27 Points)
Replied 13 December 2010
we are sub-contractor to the main contractor. The main contractor is under composition scheme. We are also under composition scheme.
The main contractor receives the payment from govt department and deposits service tax on the same.
After deducting taxes like service tax , Vat , Income tax, Labour cess and his profit, the main contractor releases the payment to us.
As per the contract the main contractor is liable for all taxes and duties towards the government.
The payment we receive is the one on which Main contractor has already deposited service tax.
Under the act weather the service tax is to be paid again or not by the sub-contractor.
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