Service Tax on Sub contract

[SANKARA NARAYANAN ME]

ABC Ltd is a Construction Company. This Company subcontract work to another company XYZ Ltd. ABC Ltd receive and pay Service Tax to the central govt. Whether it is mandatory for XYZ to collect Service Tax from ABC Ltd.

AI Summary

Debate on Service Tax: Should Subcontractor XYZ Collect from Main Contractor ABC? 2015 Judgment Cited. ABC Ltd, a construction company, subcontracts work to XYZ Ltd and pays service tax to the government. The query is whether XYZ Ltd must also collect service tax from ABC Ltd. One response affirms that XYZ should collect service tax, which ABC can use as credit. Another participant questions this, arguing that the main contractor (ABC) is not liable for service tax since they do not provide the service directly; instead, the subcontractor (XYZ) is responsible. A reference to a 2015 Kerala High Court judgment supports this view, suggesting the main contractor only retains profit without providing service.