05 April 2013
Our company is into trading of IT and Consumer Electronic Goods ie laptops, desktop, printers and get order from all over India to supply the product. Before dispatching the goods ie laptops/printer our company uses a polythene ie thinner to cover the product and if box received from our supplier is in damaged condition then uses cello tape so that the same does not get damaged and product is intact. We do not charge anything extra from the customer to cover the product but just as an extra security measure do this activity and incur Packing Expense for it.
Now, a question arises whether this is taxable service under service tax act under the category Packaging Service?
05 April 2013
No, your activity is not liable to ST.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
05 April 2013
Sir, if you could just elaborate with any justification as to why the same should not fall into taxable service category as we need to argue for it with the Service Tax Department...
05 April 2013
You are not receiving any consideration for your packaging activity. You are basically only a trader. ST can only be levied when you are receiving some consideration for packaging activity. The dominant nature is trading in your case. For argument purpose your strong emphasise should be that your price do not change whether you pack or do not pack the goods, it is only an incidental activity in course of trade.
CAclubindia
