ST paid by contractor !!!

Dear Friends,

I have got a PM from one of my friend at CCI, He is not able to write proper query,

Can you please help me in getting proper query from the below PM.


Dear Sir I am a Contractor and I am Service Tax Collect from my Contractor and at same time i was Service Tax Paid to my Sub Contractor at Service Tax Paid Time I will Cen Vat Credit Taken on Payment to my Sub Contractor. Exmp. I was Collect ST From my Contractor 10 and I am Paid ST to my Sub Contractor 5 Then i will paid ST only 5 is this correct or not and Cen Vat Credit taken only i was Amount paid to My Sub Contractor or Bill Received my Subcontractor Plase Tell Thanks in Advance


Replies (3)

on case of contract service tax, there are two options in your hand

1) pay ST @ full rate and avail input credit on sub contractor bills

2) pay ST @ 4.12% and forget the input credit.

 

choice is in your hands.

I think he wants to know whether if he collects Rs.10 as service tax and has a credit  of Rs. 5 and pays the balance of Rs.5 then whether it is correct or not.

As per me i think it is correct.

If he does not want the hardships then has to pay the service tax at 4.12% on ther service and forget about the input.

mere duty collection 10/5 does not represent that the tax is paid at full rate or at composition rate, 

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