Sub-contractor service tax demand falls where main contractor already paid tax and the dispute is revenue neutral.

Service tax demand against a sub-contractor is discussed as unsustainable where the main contractor has already discharged tax on the full composite value of the services. The analysis notes that repeated levy on the same services would result in double taxation, and treats the dispute as revenue neutral because any tax paid by the sub-contractor would be available as credit to the main contractor. On that basis, the demand is stated to fail and consequential relief follows.

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Issues: Whether service tax demand could be sustained against a sub-contractor when the main contractor had already discharged service tax on the full value of the services, resulting in alleged double taxation and revenue neutrality.

Analysis: The Appellant was engaged as a sub-contractor, and the record showed that the main contractor had discharged the entire service tax liability on the composite value. The Tribunal noted the certificate produced to this effect and held that collecting tax again from the sub-contractor for the same services would amount to double taxation. It further accepted the revenue-neutral character of the dispute, since any tax paid by the Appellant would have been available as credit to the main contractor.

Conclusion: The demand against the Appellant was unsustainable and the appeal was allowed with consequential relief.

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