Who is responsible to collect service tax from end user on software in distri-dealer-sub dealer case

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  1. Datanal

    Datanal New Member

    To the Service Tax expert panel

    Dear Sir/Madam,

    I would like to know relevant rules for the following situation:
    A small scale sub-dealer was purchased Microsoft software licenses from a dealer for amount X plus VAT1 plus service tax ST1 on amount X. Dealer invoice contains sub-dealer PAN & Service tax registration number. Then sub-dealer sold same software without modifying to a end-user(govt department) at a price Y plus applicable VAT2 plus applicable service tax ST2 on amount Y. The govt. Department I.e. End-user withheld the service tax amount ST2 stating the sub-dealer should remit the entire amount ST2 to govt. Account and produce the challan for releasing with-hold service amount ST2. As this is multilevel transaction, sub-dealer has already paid the service tax amount of ST1 to dealer and (ST2 - ST1) to govt account, in this situation will you guide me for the following:
    1. Whether the end-user can insist for remittance of ST2 amount to govt. Account before release of withheld amount? Relevant rules please.

    2. If not, on which rules sub-dealer ask the end-user to released the withheld amount?
    3. Any advice to get release of withheld amount.

    With regards,
    Datanal GN
     
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