Tax liability of fabric printer

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HARIKISHAN (Querist)
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21 March 2017 I just started a business of fabric printing. I print the fabric in two way
1. When client provide the fabric
2. When client not provide the fabric, we have to just print the fabric and give to them

So my question is that is there is requirement of vat and service tax registration

Please guide me. I waiting for your suggestions.

Thanks & Regards
Hari

Guest

Guest (Expert)

21 March 2017 If you have turnover exceeds 10 LAcs you need regn for St. For vat I can't tell until you tell me which state you have business. Usually above 10 LAcs regn is required

HARIKISHAN

HARIKISHAN (Querist)
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22 March 2017 In uttar Pradesh sir.
I have one more query sir that some of business men of same industry not taken the Service tax registration and they have only taken the Vat registration. As they taken only vat registration they raised the invoice of fabric and take the exemption under vat. Is this correct sir

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Guest

Guest (Expert)

22 March 2017 For UP the registration limit is Rs 5 lacs. If your turnover is above rs 5 lacs you have to register. But you should understand that if your client provides fabric and you are doing only print, then VAT is not applicable. Service tax is applicable if value of printing exceeds 10 lacs pa and your client is paying excise duty on fabric purchased from you. But if your client is not paying excise duty on the fabric purchased from you, then you have to pay service tax once your value exceeds 10 lacs.

Now I will address the question of VAT. VAT will be applicable if you purchase fabric, print and charge a total sale to your client. These transactions are "Sale" and not "service" since you will recover cost of fabric and printing totally from your client. Service tax will not apply on these sales. Since you are in UP, if the sales exceeds 5 lacs you have to pay VAT.

For other business men in your industry you say that they have taken vat registration but not taken service tax registration. But you also say that they claim exemption. What I don't understand is that why they are registering with VAT and still claiming exemption ? I am not able to understand the question.

HARIKISHAN

HARIKISHAN (Querist)
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23 March 2017 Fabric printing is exempt in vat in all over India and if we do printing with material and i also search in Google that fabric printing is also exempt in service tax.

Sir please correct me if i am wrong.

Regards
Harikishan