Consequences of payment of service tax by a constrution contractor and sub contractor, Service Tax

[paresh zatakia]

Dear Sir, when construcion contractor has paid service tax, but subcontractor has not paid and added in bill to contractor considering that subcontractor has pais,what is the consequence if subcontractor is registered under service tax Regards Paresh Zatakia

Posts / Replies

[Surender Gupta]

Your query is not clear, is it related to Cenvat Credit or Liability of service tax? Kindly elaborate.

[Madhukar N Hiregange]

There is no specific section or rule which allows that the sub contractor need not pay where the main contractors pays. However some 1997 circulars allowed for the same which have till date not been rescinded. Therefore you maybe able to take a defesne that the same would equally be applicable for constrcution contract. Youy could say that there is no revenue loss. However the critical aspect would be to be able to prove that the main contractor has paid the ST. However if the sub contractor has collected the consideration as ST from the main contractor then as per Section 73A the same would be payable to the Government.