Liability of user when Service Provider does'nt collect Service Tax

[prasanna shenoy]

What is the liability of a service user ( contractor ) if his service provider ( sub-contractor ) does not include and collect Service Tax in his invoice.

[Rama Krishana]

There is no liability if subcontractor is not charging service tax in his invoice even if he is supposed to charge service tax from the service recipient. But, in case sub contractor proves that he has not charged service tax on the advise of main contractor, there may be civil liability but there is no scope of any tax liability on the part of main contractor.

AI Summary

Service tax liability: main contractor not liable when subcontractor fails to charge tax, civil risk only if advised. Main contractors are not liable for service tax solely because a subcontractor failed to charge and collect tax; the statutory tax obligation remains with the person legally required to collect and remit. A civil claim between subcontractor and main contractor may arise if the subcontractor proves it did not charge tax on the main contractor's advice, but that civil exposure does not create tax liability for the main contractor.