Cenvet Credit

[Guest]

We are doing Earth Work activity in Gujarat. We are receiving Service Tax on Doing Job + Additional and we are making payment of Service tax regularly. But after 3 accounting year query raise by department that in 1st year we are doing some work by sublet by using machinery of some else contractor, now department demanding service tax payment liability on that contractor bill raise to us. so give us best solution for taking some way out???

[phaniraju konidena]

Don't worry, try to fight with bar of limitation, if there were no suppression of facts from your side.

[NEERAJ KUMAR, RANCHI]

Your question is not clear. Whether department is asking for service tax from you or from your contractor. If the subcontractor did not pay service tax on the invoices raised by him to you, liability is there.

AI Summary

Service tax liability can attach to a recipient when a subcontractor fails to discharge tax on invoices for outsourced work. A recipient of earth work services subcontracted work where subcontractors supplied machinery and billed the recipient; the tax department later sought service tax from the recipient based on those subcontractor invoices. Advisers noted the potential to contest recovery on the limitation bar if there was no suppression of facts, and that if the subcontractor failed to pay service tax on invoices issued to the recipient, liability may attach to the subcontractor or affect the recipient's exposure.