Service tax liability for a Sub contract from the Main contractor who is rendering Service to the Government.

[vaishali nawandar]

One of my clients is a subcontractor of the Main contractor. The main contractor renders Surveying and Map making Services to the Government which is exempt. Whether the Subcontractor (registered under Service tax) needs to collect the Service tax and pay it to the Govt. Please resolve the query and give specific applicable notifications/Sections/Circulars as early as possible.

AI Summary

Subcontractor Must Pay Service Tax Despite Main Contractor's Exemption; No Provisions Support Subcontractor's Exemption Claim. A subcontractor working under a main contractor, who provides surveying and map-making services to the government, inquired about their service tax obligations. The main contractor is exempt from service tax due to being an agency authorized by the government. However, the subcontractor is not eligible for this exemption and must collect and remit service tax, as clarified by respondents. The subcontractor sought further clarification on whether any provisions or case law could support their exemption if the main contractor's agreement permits subcontracting, but responses confirmed the exemption applies only to the main contractor.