Works Contract

[Rushi Upadhyay]

Respected Members,

I have a query w.r.t. works contract service.

As per amendments in Mega Exemption Notification No. 25/2012-ST, works contract entered into after 01.04.2015 is not exempted as Sr. 12 (a)(c) and (f) was omitted. However new Sr. No. 12A was inserted with retrospective amendment from 01.03.2016 and work order entered into prior to 01.04.2015 was made exempted again.

Now the issue is my client has entered in sub-contract and sub-contract was entered into after 01.04.2015 but main contractor was allotted the work in 2014 only and we have claimed the exemption vide Sr. No. 29(h) of mega exemption notification which interealia reads as under:

‘29. Services by the following persons in respective capacities –

(h) sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt;”

and therefore argument was putforth that when the main contractor is exempt than sub-contractor would also get exempted and it does not affect the taxability on the part of sub-contractor even contract of sub-contract with main-contractor is entered after 01.04.2015.

I am searching for case laws where similar situation was occurred but not able to find the same.

Any of the member can help would be highly appreciated.

Thanks in advance.

AI Summary

Debate on Service Tax Exemption for Sub-Contractors Post-2015 Amendments: Key Case Laws and Legal Defenses Under Section 102 A forum participant raised a query regarding the applicability of service tax exemptions on works contracts following amendments to the Mega Exemption Notification No. 25/2012-ST. The issue involves a sub-contractor who entered into a contract after April 1, 2015, while the main contractor's contract was exempt as it was initiated in 2014. The participant seeks case laws supporting the claim that the sub-contractor should also be exempt. Responses discuss the interpretation of exemption notifications and suggest potential legal defenses, referencing Section 102 of the Finance Act, 1994, and the implications of Sr. No. 29(h) and 12A.