Dear Experts,
One of my clients executed a civil contract with a government department on a sub-contract basis. Now, he received the order by demanding huge service tax liability to my client.
Is there Mega Notification no.25/2012 that will be applicable to sub-contracts too?
Thanks in advance.
Sub-contractor faces 2016-17 service tax demand; Mega Notification No. 25/2012 may not cover their services. A client involved in a civil contract with a government department as a sub-contractor received a significant service tax demand for 2016-17. They inquired about the applicability of Mega Notification No. 25/2012 to sub-contracts. An expert clarified that the mega-exemption for construction services does not automatically extend to sub-contractors unless their services independently qualify for exemption. Another expert noted that service tax demands are often time-barred and courts have quashed similar demands, suggesting no immediate need for concern. The mega exemption is applicable if the sub-contractor's services fall under exempt works contracts. (AI Summary)
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