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Dilemma! VAT OR WCT OR SERVICE TAX OR EXCISE???, Other Topics |
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Dilemma! VAT OR WCT OR SERVICE TAX OR EXCISE??? |
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Your client is engaged in the manufacture of ready made garments falling under Chapter 61 of first schedule of Central Excise Tariff Act, 1985. According to Section 2 (d) of Central Excise Act, 1944 excisable goods means goods specified in the first schedule and second schedule to Central Excise Tariff Act, 1985 as being subject to duty of excise. Therefore the process undertaken by your client amounts to manufacture and is liable to excise duty. Section 66 D of Finance Act, 1994 (Negative list) process that results in 'manufacture' of goods is not 'service' and hence the same is not liable to service tax. Since your client manufactures excisable goods on job work basis, he can avail the exemption granted by Notification No. 214/86-CE dated 25.3.86 as amended subject to the conditions specified therein. In my opinion your client need not pay service tax. But please ensure the raw material supplier of you client pays duty on the finished goods returned by your client. I am extremely confused whether fabricating of clothes is a works contract or a manufacturing process Posts / Replies Showing Replies 1 to 2 of 2 Records Page: 1
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