TAXABILITY, VAT + CST

[LAXMIKANT ARORA]

Whether  textile processing such as tailoring, dying. fabrication, embroidery and other similar activities are works contract or not ?

Posts / Replies

[rishi mohan]

In the above case.Works contractor is not required to charge 4 percent VAT on 33 percent of value of the invoice. Being 4 percent a composition one and VAT at the rate of 4 percent should be paid on total value. However, Service tax is payable on 67 percent value at the rate of 12.36 percent with the CENVAT credit of inputs/input services.

[Madhukar N Hiregange]

In tailoring there is no transfer of property and therefore not a WC. Not liable under ST also. 

Dying- to the extent of transfer of property, it is liable. To extent of consumables used not liable . Exempt as intermediary processing relation to textile

Embroidery maybe liable as thread transferred to that extent. NO ST due to same reason as above.