Service tax liability for sub-consultants stayed with the prime consultant where billing ran through the main consultant.

Service tax liability in a consulting arrangement was treated, prima facie, as falling on the prime consultant who billed the client, rather than on the sub-consultant rendering services under that arrangement. The record showed that the appellant acted as a sub-consultant and invoiced the prime consultant, who in turn invoiced the client. On that basis, the tribunal waived pre-deposit of service tax and penalties and stayed recovery pending disposal of the appeal.

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Issues: Whether waiver of pre-deposit and stay of recovery were warranted in a service tax dispute involving liability of a sub-consultant engaged under a prime consultant.

Analysis: Prima facie reliance was placed on the trade notice clarifying that where services are rendered to a prime consultant, the service tax liability falls on the prime or main consulting engineer who bills the client, not on the sub-consultant. The record indicated that the appellant was acting as a sub-consultant and was billing the prime consultant, who in turn billed the client.

Outcome: Pre-deposit of service tax and penalties was waived and recovery was stayed pending disposal of the appeal.

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