service tax Demand raised for the year 2016-17

[THYAGARAJAN KALYANASUNDARAM]

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.

AI Summary

Mega exemption for construction services may not extend to subcontractors, except those performing exempt works contract services.
The Board's guidance states that the mega-exemption for construction services does not automatically extend to subcontractors whose services are inputs to a main contractor; the subcontractor's own activity must independently fall within the exemption. Subcontractors performing works contract services are exempt if the main contractor provides exempt works contract services. Procedural points include potential time-barred demands and the department's burden to prove liability.