Service tax liability confusion

[Asked by 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

Works contract service tax liability for multi-party contracts: determine taxable value allocation between contractor and subcontractor.
Query concerns allocation of service tax where a works contract service awarded by an educational society to a government PSU principal contractor includes work performed by a sole proprietor subcontractor; contract price equals subcontractor's quoted value plus principal's commission. The WCS was removed from the negative list and is taxable; the question asks how to compute service tax and apportion liabilities among client, principal contractor and subcontractor.