Apllicability of Service Tax
This query is : Resolved
25 May 2009
A company is engaged in the business of Metalising (zinc coating mainly of auto parts). the work is done on job work basis. they raise a consolidated bill for the Material and their service Cost. the firm is also registered in the Sales tax and paying sales tax @ 1 % on the sales turnover. the total turnover of the Company is About 25-30 lacs.
Is service tax applicable on this kind of work?
If yes under with service and what will be the rate of service tax?
Is service tax applicable on this kind of work?
If yes under with service and what will be the rate of service tax?
25 May 2009
Liable under BAS - production / proicessing of goods not amounting to manufacture.
On the labour charges part there is a liability.
Options: Avail cenvat credit on raw materials and pay ST on full amount. [ may not be feasable since volume low and excise documents may notbe available]
Avail deduction for materials cost under Not.12/2003 [doumentary proof for same could be an issue]
A possible legal argument couldbe that this is works contract and in WC the entry does not exist. [ to use this argument there shouldbe some case law precedence. which presently is not there]
On the labour charges part there is a liability.
Options: Avail cenvat credit on raw materials and pay ST on full amount. [ may not be feasable since volume low and excise documents may notbe available]
Avail deduction for materials cost under Not.12/2003 [doumentary proof for same could be an issue]
A possible legal argument couldbe that this is works contract and in WC the entry does not exist. [ to use this argument there shouldbe some case law precedence. which presently is not there]
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26 May 2009
thanks for the reply.
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