SERVICE TAX INPUT CREDIT

[chandrashekhar bathini]

a company providing construction services to rail vikas nigam limited in ap, this service is exempt from service tax because it providing services to railways.

company receiving manpower services and that company charging sevice tax in their invoice ,my query is we are not paying any output service tax so that we do not pay sevice tax on manpower service received

please give the answer for my query

thanking you

AI Summary

Reverse charge: service receiver must pay tax on manpower supplies even when their output services are exempt.
The taxability of an input service is independent of the output service: supply of manpower subject to the reverse charge requires the service receiver to pay service tax even if the receiver's construction services to the railway are exempt; agency or input services used in providing a negative-list main service can remain taxable when consideration is received by the agent.