Service tax on readymade garment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 December 2012 One of my client is Readymade Garment Manufacturer.He is Manufacturing by various process such as stitching,washing,embroidering dying,printing etc. from outsider job worker.in this case who is liable for service tax ? if he is a non branded & excise duty is not applicable to him then service tax is liable ? who have to pay service tax ?

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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01 January 2013 Carrying out an intermediate production process as job work in relation to any goods on which appropriate duty is payable by the principal manufacturer is covered under negative list hence no service tax is applicable for job worker.
However, if it is no non branded then there is no duty and accordingly service tax is to be charged by the job worker or under reverse charge as the case may be.

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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04 January 2013 You are selling the garments and the same is covered under VAT. You have to collect VAT from the buyers and pay accordingly. As you are not rendering in services at the time of sale of your goods, no service tax is payable but you have to pay service tax to the people who are connected with the various process dying, printing, washing, em bordering, stitching etc. The service tax paid by you can only be adjusted if you collect any service tax otherwise nothing can be done. So take the services of the persons whose annual bill does not exceed 10 lacs of rupees

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