Wet wash whether it is service or not??? after 1.7.2012
This query is : Resolved
17 December 2012
HI EXPERTS I HAVE ONE QUERY ABOUT SERVICE TAX . I AM TAKING REGISTRATION OF ONE OF OUR CLIENTS OF SERVICE TAX AS HE PROVIDES DRY CLEANING SERVICE. BUT I WANT TO KNOW WEATHER WE SHOULD PAY SERVICE TAX ON WET WASH SERVICE PROVIDED BY HIM. OR I HAVE THE QUESTION WEATHER WET WASH IS A SERVICE OR NOT IN THE DEFINATION OF SERVICE TAX???????
EXPERTS PLEASE HELP US.
THANK YOU.
EXPERTS PLEASE HELP US.
THANK YOU.
17 December 2012
yes it is service as in the budget negative list of services have been introduced all other service not included in the list fall under the service
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17 December 2012
but sir read this annexture. it is clearly mentioned that dry cleaning is a servic e but wet wash is not the service since the beggining. please read the annexture below. and give a suitable solution.
Dry cleaning service:
1. The section referred to hereinafter are the sections or clauses of the Finance Act, 1994 as amended by the Finance Act, 2002. Reference to sub-clause or clause means clause or sub-clause of section 65 of the Finance Act, 1994 as amended by the Finance Act, 2002.
2 As per clause (31), “dry cleaning” includes dry cleaning of apparels, garments or other textile, fur or leather articles. As per clause (32) “dry cleaner” means any commercial concern providing service in relation to dry cleaning. The taxable service, as per clause (90)(zt) is any service provided to a customer, by a dry cleaner in relation to dry cleaning.
3. Dry cleaner normally performs following process as on cloths during the process of dry cleaning:
(i) Tagging and inspection- Dry cleaner inspects the cloths and tags them with an identification label.
(ii) Pre –treatment- a stain remover is applied to remove the stains. Use of stain remover depends on the nature of stains such as stains of grease, oil, ink, colours etc. Fabric/cloth is then rinsed and dried.
(iii) Dry cleaning- a dry cleaning machine is a motor driven washer/extractor/dryer and it holds clothes in a rotating, perforated stainless-steel basket. Cloths are washed with a solvent. There may be various types of solvents used for dry cleaning such as perchloethylene (perc), carbon tetrachloride, trichloethylene and petrol etc. As the clothes rotate in the perforated basket, there is a constant flow of clean solvent from the pump and filter system. After cleaning, the clothes are drained to expel the solvent and ten goes into a dry cycle by circulating warm air.
(iv) Post spotting- If there is any spot/stain left after the dry cleaning, it is removed using water or any other appropriate chemical.
4. A point has been raised as to whether service tax is leviable on wet cleaning also. Wet cleaning is a process of cleaning garments in water and water soluble detergent. It is clarified that service tax is leviable only on dry cleaning. Accordingly service tax is not leviable on wet cleaning/washing provided the dry cleaner clearly mentions it in the bill. If details are not mentioned in the bill, it would normally be understood that clothes have been dry cleaned and in such situation service tax is liable to be paid.
5. A point has been raised whether service tax is payable on the job of dyeing, darning etc. It is clarified that since these activities are not dry cleaning, these service are not taxable provided it is clearly indicated in the bill.
Dry cleaning service:
1. The section referred to hereinafter are the sections or clauses of the Finance Act, 1994 as amended by the Finance Act, 2002. Reference to sub-clause or clause means clause or sub-clause of section 65 of the Finance Act, 1994 as amended by the Finance Act, 2002.
2 As per clause (31), “dry cleaning” includes dry cleaning of apparels, garments or other textile, fur or leather articles. As per clause (32) “dry cleaner” means any commercial concern providing service in relation to dry cleaning. The taxable service, as per clause (90)(zt) is any service provided to a customer, by a dry cleaner in relation to dry cleaning.
3. Dry cleaner normally performs following process as on cloths during the process of dry cleaning:
(i) Tagging and inspection- Dry cleaner inspects the cloths and tags them with an identification label.
(ii) Pre –treatment- a stain remover is applied to remove the stains. Use of stain remover depends on the nature of stains such as stains of grease, oil, ink, colours etc. Fabric/cloth is then rinsed and dried.
(iii) Dry cleaning- a dry cleaning machine is a motor driven washer/extractor/dryer and it holds clothes in a rotating, perforated stainless-steel basket. Cloths are washed with a solvent. There may be various types of solvents used for dry cleaning such as perchloethylene (perc), carbon tetrachloride, trichloethylene and petrol etc. As the clothes rotate in the perforated basket, there is a constant flow of clean solvent from the pump and filter system. After cleaning, the clothes are drained to expel the solvent and ten goes into a dry cycle by circulating warm air.
(iv) Post spotting- If there is any spot/stain left after the dry cleaning, it is removed using water or any other appropriate chemical.
4. A point has been raised as to whether service tax is leviable on wet cleaning also. Wet cleaning is a process of cleaning garments in water and water soluble detergent. It is clarified that service tax is leviable only on dry cleaning. Accordingly service tax is not leviable on wet cleaning/washing provided the dry cleaner clearly mentions it in the bill. If details are not mentioned in the bill, it would normally be understood that clothes have been dry cleaned and in such situation service tax is liable to be paid.
5. A point has been raised whether service tax is payable on the job of dyeing, darning etc. It is clarified that since these activities are not dry cleaning, these service are not taxable provided it is clearly indicated in the bill.
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17 December 2012
refer point number 4 in above.
thank you sir for your reply.
thank you sir for your reply.
17 December 2012
Dear Sahad,
Pl note following, for your understanding.
for widening of the tax base, negative list approch has been brought by government.
only services specified in the Negative List would be outside the purview of Service tax.
The Negative List comprises of 17 heads of services, rest all taxable.
To give effect to the Negative List approach, a number of amendments have also been propozsed.
previously In the Service tax laws, the term ‘service’ has not been defined anywhere, now giving effect to the new system of taxation based on Negative List Clause (44) of newly inserted sub-section 65B of the Act, 1994 provides the definition of service.
any activity carried out by a person for another for consideration, and includes a declared service, but shall not include the following -
1 transfer of title in goods or immovable property, 2 employee to employer 3 fees taken in court.
Now, that the term ‘service’ is defined, all services apart from those specified in the Negative List would be subjected to levy of Service tax.
I hope this would be helpful.
Pl note following, for your understanding.
for widening of the tax base, negative list approch has been brought by government.
only services specified in the Negative List would be outside the purview of Service tax.
The Negative List comprises of 17 heads of services, rest all taxable.
To give effect to the Negative List approach, a number of amendments have also been propozsed.
previously In the Service tax laws, the term ‘service’ has not been defined anywhere, now giving effect to the new system of taxation based on Negative List Clause (44) of newly inserted sub-section 65B of the Act, 1994 provides the definition of service.
any activity carried out by a person for another for consideration, and includes a declared service, but shall not include the following -
1 transfer of title in goods or immovable property, 2 employee to employer 3 fees taken in court.
Now, that the term ‘service’ is defined, all services apart from those specified in the Negative List would be subjected to levy of Service tax.
I hope this would be helpful.
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17 December 2012
oh sir thank you so much you have solved my query one thanks hitted to you. thanks for replying sir. ca club india is best place to clear our doubts. thank u "Mr. Arun Biyani" for your reply. thank you so much.
have great day sir.
have great day sir.
17 December 2012
most welcome..
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