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Service tax under reverse charge
Dear All!
Please clarify the following query. The company is providing service (construction of bridges, dams) to municipal bodies ie. government. Therefore, service tax on such output service is exempted. My query is the company (contractor) in turn receives the service from a sub contractor who in turn is exempted from service tax under the mega notification. The sub contractor is an individual and provides a works contract service. Is the company liable to pay it's portion of service tax under reverse charge?
Replies (1)
Dear Aishwarya,
As you know the sub contractor is exempt from Sevice tax if he is providing WCT. In your case you are providing Services to Muncipal Bodies which is also a exempt servicre as per Mega Exemption in Service Tax.
The Company would not be required to pay Service Tax on reverse charge as the WCT Services provided by the sub contractor to that company which in turn is providing servi is exempt from service tax as per Notification no 25/2012 ST, dated 20.06.2012 .
Pls refer the above Notification.
Hope u got it.
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