Credit of service tax paid to sub contractor

[puneet virmani]

A is a principal contractor engaged in sanitation work contracts-registered in service tax and paying service tax @33% of total value recieved after deducting WCT (sales tax)& TDS (Income tax)- not claiming any othet nature of deductions. As contractor gives service tax to sub-contractors on payment given to them in execution of contract . can contractor A claim benefit of service tax paid to sub contractor.

[Guest]

Previouly it was allowed. But as on today credit for service tax paid is not allowed

AI Summary

Service tax credit on payments to subcontractors is not available under current practice, despite prior allowance. Principal contractor registered for service tax remits tax after deducting withholding and TDS and pays service tax on amounts to subcontractors. Although credit for service tax paid to subcontractors was previously permitted, current practice does not allow the contractor to claim credit for service tax discharged on subcontractor payments.