We (Pile Engineers (India) Pvt. Ltd.) are awarded a work as sub-contractor purely on labour rate basis for construction of RCC Chimney for which NTPC is the Client and NBCC is their contractor. Whether Service Tax will be deducted from us, if so, what will be the % of Service Tax?
Service tax on subcontracted construction services applies to labour-rate subcontractors, requiring them to charge the tax to principal contractors. Subcontractors engaged on a labour-rate basis for construction services must levy service tax on their charges to principal contractors; the advisory specifies an applicable service tax rate to be applied by the subcontractor when billing for the labour-based construction work. (AI Summary)