Kram (CA Job) (437 Points)
14 February 2011VASATHI is into constructing of residential flats.
It has engaged sub-contractor to do earth clearing / exavation works.
Sub-contractor has not registered under ST. Rates of sub-contractor are inclusive of ST.
Pls let me know if - VASATHI - would becoming Liabile as sub-contractor has not REGISTERED & paid ST?
THNKS FOR YOUR TIME
SRIRAMA
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 14 February 2011
| Originally posted by : Kram | ||
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VASATHI is into constructing of residential flats. It has engaged sub-contractor to do earth clearing / exavation works. Sub-contractor has not registered under ST. Rates of sub-contractor are inclusive of ST. Pls let me know if - VASATHI - would becoming Liabile as sub-contractor has not REGISTERED & paid ST? THNKS FOR YOUR TIME SRIRAMA |
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when the sub-contractor is not registered, how the rates are inclusive of ST?
they may have availed 10L exemption, so its their liability only to pay taxes.
Anil sharma
(accountant)
(29 Points)
Replied 14 February 2011
Dear sirs I have not quired for sub contractor Ihave a quary for CIVIL CONTRACTOR that means our nature of work is to Build a part of residential flat or commercial building with supply of sand,stone chips and bricks and other material will provided by company as iron rod,cement etc and 100% labor supplied by us.hare i know the service tax is applicable and I have taken it and vat tax too. Although I want to know the service tax slab on bill and rules with service tax clause .Please send with Example.
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 15 February 2011
Sub-contractor is liable to service tax for the services provided by him in relation constrcution of residential complex. This is an input service for the Main contractor who is liable to service tax for the entire work . Failure of sub-contractor to pay tax has no impact on the tax liability of the main contractor.
Kram
(CA Job)
(437 Points)
Replied 15 February 2011
Thnks Nair for the clarificaiton.
Main-contractor/Builder is opting for composite scheme wherein he would pay 4% on 25% of sale value. Main-contractor would not be getting any credit.
ONLY CONCERN is sub-contractor THOUGH he is liable to pay ST he is not paying the same.
WOULD Main-contractor BE liable for sub-contractor non-compliance/payment of ST. MAIN-CONTRACTOR is aware of sub-contractor collecting ST but not paying the same.
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 16 February 2011
Upto 2007 the sub contractors were not liable where the main contractor paid the ST. However now the sub contractor is independetly liable and the main contractor can avail the credit for the ST paid by the sub contractor and utilsie the same for making hsi payment of ST.
In this case if liable under worsk contract a- residential complex services - building more than 12 flats the principal wouldbe liable.
Where the sub contractor does not pay, the liability for the same cannot be fastened on the pricnipal.
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