Galvanising on Iron/steel article , Central Excise

[Suminder Patial]

Hi I have a subcontractor who is raising his invoice for "Galavanising" process with excise duty. I want to know that Galvanising on Iron/steel artical is equal to Sale or it is an subcontracting process. plz provide me related notification or circular if it will a sale. regards Suminder Patial

Posts / Replies

[Madhukar N Hiregange]

Exciseduty is on manufacture and removal and need not be in realtion to sale. Where there is a transfer of property in goods the same would be a liable to VAT

[Ravi Chopra]

If your query is related to VAT / Sales tax and about the nature of glavanising process for the purpose of said VAT / Sales Tax, the same would not be subject to deemed sale or sale or works contract if you are not adding any goods from your side and you are not adding value by putting goods in the process. Transfer of property is an essential thing for the purpose of vat / sales tax.

[Suminder Patial]

Hi One thing i want to clear here that i am sending the material for galavanising process on 57f4(job work challan) & subcontractor send back that materail on his excise invoice with charge of excise duty & cst. is there any provision for such ?

[Surender Gupta]

As per chapter note no. 4 of chapter 73, it is manufacture, which read as, "4. In relation to products of this Chapter, the process of galvanization shall amount to 'manufacture' - But since you are sending goods under excise challan (old form 57f4), job working should not charge duty of excise by following the notifiction no. 214/86

[Suminder Patial]

hi where a jobworker use his own raw material in jobwork process & he takes the cenvat credit on that material. so there he have to charge the excise duty on job work or not?

[Mukesh Kumar]

Under vat it is merely a subcontracting work since there is no transfer of property from one person to another. But in excise, the term manufacture is not dependent upon transfer of property in goods from one person to another but conversion of material in different goods after undertaking certain processes and includes deemed manufacture. Sales tax and VAT must be seen independently.