shrikant (self ) (65 Points)
20 August 2009client "P" entrusts a commercial construction project to a contractor, "A".
the contractor "A" outsource a part of the project to another person "B" (a sub-contractor)
The sub-contractor further gives part of his work to yet another sub-contractor "C".
Now, questions are as follows,
Whether "C" and also "B" are required to discharge service tax on their part of taxable service?
If so,
whether B and A can avail CENVAT facility of service tax paid by C and B respectively
CA pradeep sultania
(direct and indirect taxation)
(23 Points)
Replied 20 August 2009
Firstly we have to see under which category the construction work is executed
so that the particular service is eligoble for input credit
Sub Contractor Down the line are eligible for charging the service tax to the contractors and contractors are eligble for taking the cenavt credit provided the commercial construction should be under works Contract Service or 10/2003 notifiaction or no abatement under the CICS................
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 20 August 2009
In your example the sub sub contractors would charge the ST since there is no exemption for them.
Yes the service receiver would be eligible for availing the credit on the same as an input service used in provding their services to P.
CAclubindia
