30 May 2010
I recently joined in one Mango Pulp Manufacturing concern, we purchase mangoes and we do process and clearances to MNC companies in addition to that we are taking job work on behalf of MNC companies ie., MNC Companies PUrchase Mangoes and sent to us to convert the Mangoes into Pulp ( like job work ).
My question is whether Job work , what we are doing on behalf of MNC Companies ,attract Service tax under Business Auxiliary Services? our final product exempt from Service Tax
My Second question is for the year 2009-10 our services (job work ) crossed Rs. 2crores but service tax registration not made and no service tax paid.
31 May 2010
My suggestions and opinion on this: First, purchase of mangoes and Sale after process will not cover under service tax. Second, the work undertaken by your company to do process on behalf of MNCs cover under Business Auxiliary services as ‘production of goods on behalf of the client’ and you have to collect and pay service tax. Value of taxable service shall be the gross amount charged by the service provider of such service rendered by him. Reg. registration, immediately register and pay service tax and collect the same from MNCs. If it is not possible to collect service tax from MNCs then you have to bear the service tax from your pocket by reverse calculation.
CAclubindia
