TaxTMI 
TaxTMI 
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.
Service Tax on Sub contract
18 Sep 2015 
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Service tax liability on subcontracted construction services: subcontractor pays and main contractor may avail credit, subject to legal dispute.
The subcontractor must discharge service tax on services rendered and taxes so paid are available to the main contractor as input tax credit to offset its service tax liability. An opposing view contends the main contractor should not bear service tax since it did not perform the outsourced service and the subcontractor, as the actual provider to the contractee, alone should be liable. (AI Summary)
The subcontractor must discharge service tax on services rendered and taxes so paid are available to the main contractor as input tax credit to offset its service tax liability. An opposing view contends the main contractor should not bear service tax since it did not perform the outsourced service and the subcontractor, as the actual provider to the contractee, alone should be liable. (AI Summary)