Service tax liability confusion

[Guest]

Dear Sir,

I have summarized below a WCS agreement between three parties. Please help on how to calculate service tax liability.

Party A : Kendriya Vidyalaya Sangathan (Educational Society/Trust) - Client

Party B : Govt of India PSU (Limited company) - Principal Contractor

Party C : Individual (Sole Proprietorship) - Sub Contractor

Party A has awarded WCS pertaining to original works to Party B as under; Total award value of work = Value of work quoted by Party C + Commission charges of Party B.

The WCS is removed from negative list with effect from 1st March 2015 and is taxable. Please guide on how to calculate the service tax of the work and the liabilities of individual parties.

Thanking you,

Surya Yeshwanth.

AI Summary

Guidance Sought on Service Tax Liability Calculation for Works Contract Service Involving Educational Society and Subcontractors A query was raised regarding the calculation of service tax liability under a Works Contract Service (WCS) agreement involving three parties: an educational society as the client, a government public sector unit as the principal contractor, and an individual sole proprietorship as the subcontractor. The client awarded the contract for original works to the principal contractor, with the total award value comprising the subcontractor's quoted work value plus the principal contractor's commission. Since WCS was removed from the negative list effective March 1, 2015, the query seeks guidance on calculating the service tax and determining each party's liabilities.