If Service Tax Paid on Output Service, connected input service exempted

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..... Dear Experts, If we pay Service Tax on output service of Erection Commissioning, connected service done by a sub contractor, is there any exemption for him, since we are paying tax on final output service. - Reply By Rajagopalan Ranganathan - The Reply = Sir, The sub-contractor is liable to pay service tax on the service provided by him. However the main contractor can take credit of serv .....

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..... ice tax paid by the subcontractor and use the credit for payment of service tax by him. CBEC has clarified in Circular No. 96/7/2007-ST dated 23.8.2007 that a sub-contractor is essentially a taxable service provider. The fact that services provided by such sub-contractors are used by the main service provider for completion of his work does not in any way alter the fact of provision of taxable se .....

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..... rvice by the sub-contractor. Services provided by sub-contractors are in the nature of input services. Service tax is, therefore, leviable on any taxable services provided, whether or not the services are provided by a person in his capacity as a sub-contractor and whether or not such services are used as input services. The fact that a given taxable service is intended for use as an input serv .....

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..... ice by another service provider does not alter the taxability of the service provided. - Reply By KASTURI SETHI - The Reply = After 1.7.2012, the concept is crystal clear. Services provided by Sub-contractor is exempted only if the services provided by the main contractor are exempted. If main contractor is liable to Service Tax, sub-contractor is also liable to Service Tax. - If Service Ta .....

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..... x Paid on Output Service, connected input service exempted - Query Started By: - Ramesh M Dated:- 17-10-2015 Service Tax - Got 2 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax .....

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