Liability of Sub contractor

[Asked by Guest]

A civil contractor sub-let a part of the contract to Sub-contract. Is Sub-contractor liable to Sevice tax in respect of work done for Contract not involving separate contract from the party.

AI Summary

Service tax liability: subcontractor may be exempt where same-category main contractor pays and claims cenvat credit.
Where the main contractor and subcontractor are registered in the same category and the subcontractor does not provide services directly to the customer, the subcontractor is generally not liable to service tax; historical circulars support this for past periods. For future contracts it is advisable for the subcontractor to charge service tax so the main contractor can avail Cenvat credit, applying applicable abatement or valuation rules and taking account of subsequent credit rules.