One of our client did man power supply up to 31.03.2012 on sub contract basis and not collected service tax and not shown those receipts in ST returns and paid taxes on the balance turnover only.
Now dept. gave notice stating as MIS DECLARED or SHORT SHOWN receipts and the adjudication shall be complete in this week.
Now his main contractor asked to submit invoices for release of service tax. Can the main contractor eligible to get input on the ST now proposed to be paid in the back drop of the mistake of the sub contractor???
What are the implications in this case and how to proceed further. Dept. going to conclude before payment of the tax, by issuing adjudication orders with penalty.
Manpower Supplier Faces Tax Notice for Unreported Service Tax; Rule 9 CENVAT Credit and VCES 2013 Options Explored A client provided manpower supply services until March 31, 2012, without collecting or reporting service tax, leading to a notice from the tax department for misdeclared or underreported receipts. The main contractor now requests invoices to claim input tax credit. Respondents suggest that CENVAT credit might be available through a supplementary invoice under Rule 9 of the CENVAT Credit Rules, provided there is no fraud or collusion involved. The possibility of using the Voluntary Compliance Encouragement Scheme (VCES) 2013 is discussed, depending on the timing of inquiries or audits. The situation hinges on proving bona fide belief and compliance with tax regulations. (AI Summary)
TaxTMI 
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