Hydraulic Hoists for hydel dam project

[Guest]

we have taken up  a work from principle contractor for doing the hydraulic hoisting work  for 75 % of our billing we have paid VAT as well as ED.Recently our principle contractor has received a notice from Service tax Dept and asked them to pay service tax @ 33% on entire contract and the same has been paid by the principle contractor.Now our issues are

1.can we get exemption and raise  service bill for the unbilled portion of work .

[Rama Krishana]

Some times it happens that an assessee pays service tax with interest without opting for litigation to buy peace and calm.

Sometimes, it is possible that the activity was not taxable or was taxable but in different manner i.e as per the wordings it appears it is works contract in nature etc.

Therefore, it is the detailed facts which would enable me to put my view on this very issue.

AI Summary

Service tax liability affects subcontractor billing and potential exemption for unbilled hydraulic hoisting work. A subcontractor for hydraulic hoisting work questions entitlement to exemption and issuance of service bills for unbilled work after the principal contractor, following a departmental notice, paid service tax on the entire contract; the advisor observed that voluntary payments are sometimes made to avoid litigation and that the correct tax treatment depends on detailed facts and whether the activity is taxable or classifiable differently such as a works contract.