In the service sector, service providers have to pay service tax on the billed amount. Hence, the service provider is penalized or has to pay interest on the amount of service tax. However, service providers are dependent on payment from the principal employer. If they do not pay on time or pay only partially, the service providers are not able to pay the service tax.
In the service sector, the priority of payment is to pay the salary to your employees, on whom our business depends. The point at issue is that the principal employer is not answerable to the central excise department for their non-payment, partial payment, or delayed payment. Ultimately, the service provider has to pay through his nose. What is the solution?