No double service tax on the same contract value when the main contractor has already discharged the full tax liability.

Where service tax has already been discharged on the entire contract value by the main contractor, the same taxable value cannot again be taxed in the hands of the sub-contractor. The admitted fact that the main contractor paid tax on the full contract and issued a certificate to that effect was treated as controlling, and the Board circular relied on by the lower authorities was held inapplicable on those facts. The practical effect is that no separate service tax liability arises against the sub-contractor for the same contract value.

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Issues: Whether the appellant, as a sub-contractor, was liable to discharge service tax when the main contractor had already discharged service tax on the entire contract value, including the portion assigned to the sub-contractor.

Analysis: The liability was examined in the light of the admitted factual position that the main contractor had paid service tax on the full contract and had issued a certificate to that effect. The Board circular relied upon by the lower authorities was held not to govern the case on these facts. The controlling principle applied was that when service tax has already been discharged on the entire contract value by the main contractor, the same value cannot again be subjected to tax in the hands of the sub-contractor.

Conclusion: The sub-contractor was not required to discharge service tax again, and the demand was unsustainable.

Ratio Decidendi: Where service tax has been paid on the entire contract value by the main contractor, no separate service tax liability arises against the sub-contractor for the same taxable value.

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