Painting of finished eqp

This query is : Resolved

Aparup sinha (Querist)
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05 August 2013 We are manufacturer of Equipment which attracts ED at the time of sale.Painting of Equipment has been offloaded to some painting contract who is responsible for supplying and applying of paint. Contractor raised Invoice with Vat for supply of Paint and raised Service Tax invoice for apply the paint.We have difference opinion regarding applicability of service tax since final product attributable to ED. Please advice, whether its covered under Mega exemption or service tax to be paid to contractor.

CA Suresh Jain

CA Suresh Jain (Expert)
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05 August 2013 As per section 66D, more popularly known as Negative List,sub section (f) any process amounting to manufacture or production of goods; is part of negative list and therefore, such process is not a taxable service.

Secondly, as per entry number 30 (c) of notification 25/2012 the service of carrying out an intermediate production process as job work in relation to (c) any goods on which appropriate duty is payable by the principal manufacturer is exempted from service tax