TAX ON READYMADE GARMENTS

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sandeep (Querist)
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10 March 2011 SIR I AM A MANUFACTURER OF READYMADE GARMENTS,& ALSO A JOB WORKER OF WASHING OF READYMADE GARMENTS,I WANT TO KNOW THAT WEATHER THE SALE OF MY JOB WORK WILL BE INCLUDED IN SALE OF MY GARMENT OR NOT BECAUSE IF I INCLUDE MY JOB WORK IN MY SALE MY TURNOVER WILL CROSS THE SSI EXEMPTION & I WILL BE LIABLE TO PAY EXISE DUTY FROM 1 MARCH2011... PLZ TELL ME ,,WHAT TO DO ...

CA Unnikrishnan Nair N

CA Unnikrishnan Nair N (Expert)
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10 March 2011 If the job work amounts to manufacture, value of the same will be aggregated for the SSI limit of Rs.400 lakhs unless the same has been under Noti.214/86 . Exfacie, washing is not manufacture, but if it is incidental to manufacture of some other excisable goods, same may amount to manufacture if the chapter notes provides so. Matter has to be examined further. If it is not manufacture, whether it is dry cleaning taxable under service to be seen.

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sandeep

sandeep (Querist)
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10 March 2011 sir my sale of readymade is abt.3.8cr & job work of 44 lac in 2009-2010 , and on my bill of washing job work includes the line "wet washing" so i am not liable to pay service tax,but as excise is applicable in this budget of 2011-12 on branded readymade garments which says that if ur sales of 2010-11 exceeds rs. 4cr then u r liable to pay excise from march 1-2011 ,so i want to understand that can department club my job work with my sales means can they say that ur sales is 3.8cr+44 lac , many many thanks for ur reply ....

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CA Unnikrishnan Nair N

CA Unnikrishnan Nair N (Expert)
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11 March 2011 Mere washing is not manufacture. Hence job work value will not be aggregated for the limit of Rs.400 lakhs. The job work bill shall show "Labor charges for washing".

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