Service tax on sub-contractor work cannot be levied again where the principal contractor has already paid on the full contract value.

Where the principal contractor had already discharged service tax on the entire contract value, including the portion executed by the sub-contractor, the same taxable value could not be brought to tax again in the sub-contractor's hands. The Tribunal followed its earlier settled ratio that double taxation on the same contract value is impermissible on these facts, and the reference to Notification No. 1/2006 did not change that result. The sub-contractor was therefore not liable to pay service tax on the duplicated value.

---

---

Issues: Whether service tax was payable by the sub-contractor when the main contractor had discharged service tax on the entire contract value, including the portion executed by the sub-contractor.

Analysis: The Tribunal applied its earlier decision holding that where the principal contractor has discharged service tax on the full contract value, the same taxable value cannot again be subjected to tax in the hands of the sub-contractor. The Tribunal treated the issue as already settled and followed the earlier ratio, rejecting the Revenue's attempt to recover tax from the sub-contractor on the same activity. The reference to Notification No. 1/2006 dated 01.03.2006 did not alter this conclusion on the facts found.

Conclusion: The sub-contractor was not liable to pay service tax once the main contractor had discharged tax on the entire contract value.

Ratio Decidendi: When service tax has already been discharged by the main contractor on the full contract value, including the work allotted to the sub-contractor, the same value cannot be taxed again in the hands of the sub-contractor.

---