works contract - service tax on sub contractor

[SANJAY MACHE]

One of my client (B) is working as sub-contractor (B) for providing services to main contractor (A) towards the service contract(C) of main contractor (A) with his client (C). Main contractor has paid the service tax on total value of services (C). As per agreements/work awards by main contrator (A) with my client (B)the service tax is to be borne by main contractor (A). Total turnover of my client (B) by subcontracts from main contrator (A) has exceeded Rs. 12 Lakhs. My Client (B) holds service tax registration and is paying service tax on direct orders (excluding sub-contract works).In this case whether my client (B) is liable to pay service on sub-contracts? Whether he shall show the sales towards services-by-sub-contract in service tax returns with tax liability as nil? please advice and provide references in service tax notifications/circulars/acts.

AI Summary

Service tax liability on sub-contractors: pay and disclose sub-contract value in returns; main contractor may claim cenvat credit.
Sub-contractors must pay service tax on taxable services they render and report the value in returns; the main contractor may claim cenvat credit for service tax paid by the sub-contractor where that service constitutes an input service.