Service Tax
TRT-2025-
Cestat Ahmedabad
Date:-19-06-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 19 June 2023
Parties: Thakarshi J Likhiya Vs Commissioner of Central Excise & ST, Rajkot
Facts –
- The Appellant, Thakarshi J Likhiya, is a sub-contractor, had bonafide belief that there is no liability to pay service tax as the main contractor discharged the liability on the full contract value.
Issue –
- Whether the appellant is liable to pay service tax as sub-contractor when the main contractor discharged the liability on the full contract value?
Order –
- The Tribunal observed that there cannot be any malafide in the facts of the present case for the reason that the main contractor discharged the entire service tax liability on the total value of the contract which includes the value of the service provided by the sub-contractor also.
- If the appellant being a sub-contractor would have discharged the service tax liability, then to that extent the liability of service tax on the main contractor would have reduced therefore, it is clearly a case of Revenue neutral.
- The Larger Bench of the Tribunal in the case of Melange Developers Pvt. Limited held that sub-contractor is required to pay service tax. The said judgment was delivered in 2020. Accordingly, the appellant had bonafide belief that there is no liability to pay service tax being a sub-contractor. The decision cited by the learned Counsel directly on the point of limitation in case of liability of service tax on the sub-contractor. The ratio of the decisions cited supra is directly applicable in the present appeal.
- It was held that the demand though on merit is sustainable but it is clearly hit by limitation and hence not sustainable.
Download Case Law
