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Is Service Tax applicable for school uniforms, Service Tax

Issue Id: - 111654
Dated: 20-3-2017
By:- M Kings
Is Service Tax applicable for school uniforms

  • Contents

Respected Sir,

We are supplying uniforms and stationeries to kids as we have tie-up with a school.

Do we need charge parents Service tax and VAT but we are already buying items by paying service tax and VAT.

Request your help on he same.

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Posts / Replies

Showing Replies 1 to 15 of 15 Records

1 Dated: 20-3-2017
By:- Ganeshan Kalyani

In my view VAT will apply. Service tax will not apply.


2 Dated: 20-3-2017
By:- KASTURI SETHI

Uniform is stitched out of cloth or fabric. There is a difference between cloth, fabric and textile.As per Board's Circular No.334/8/2016/TRU dated 29.2.16 (para No.3.1.2 (i) ) tailoring does not amount to manufacture. Uniform is stitched out of cloth/fabric on job work basis as per specifications of customer. There is not an iota of doubt about this. So no exemption is available from Service Tax under Notification No.25/12-ST dated 20.6.12 as amended (effective from 1.7.12) under serial no.30(a). Since there is a difference between cloth/fabric and textile the term 'textile processing' does not include stitching.'Textile processing' is entirely different from cloth/fabric stitching.

Now it is worthwhile to discuss Section 66 D(f) of the Finance Act which is as under :-

[(f) "services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption;]"

Hence Service Tax is applicable from both angles.

From the date of enactment of Bill, 2017, vide Notification No.7/17-ST dated 2.2.17, the contents of Section 66 D (f) would be shifted from Negative List to Exempted List of services under Serial No.30 of Notification No.25/12-ST as amended.

Discussed both aspects for clarity.


3 Dated: 20-3-2017
By:- MARIAPPAN GOVINDARAJAN

Sethi Sir, still clarification is required for your views.


4 Dated: 20-3-2017
By:- KASTURI SETHI

Sir,. The subject party is doing job work for a school in the form of supplying uniform etc.They stitch shirts/pants out of cloth purchased. I treat it job work as they recover the cost of cloth etc. Job work is exempted from ST only when it amount to manufacture. It it does not amount to manufacture, it attracts ST. Stitching/tailoring does not amount to manufacture as per Board's circular mentioned.By shifting the said entry from Negative List to Exempted List of services means either CE duty or ST must be added to .Govt.' Kitty.


5 Dated: 21-3-2017
By:- Ramaswamy S

The supplier of the uniform and stationeries are bought on payment of service tax and VAT from his vendors. He then supplies the readymade uniform and stationeries to the school.

Hence, only VAT is applicable.

Regards

S.Ramaswamy


6 Dated: 21-3-2017
By:- KASTURI SETHI

The element of service is inherent.Service has been performed.


7 Dated: 22-3-2017
By:- KASTURI SETHI

Dear Querist and Sh.S. Ramaswamy, Sir,

We cannot use the word ready-made here. Fabric has been stitched/tailored as per specifications of the customer(student). De facto, querist's Co. has worked for and on behalf of school authorities


8 Dated: 22-3-2017
By:- Ramaswamy S

Dear Sir,

The schools tie up with suppliers for the supply of uniforms and stationeries. The suppliers generally sell the uniforms (made to stock) rather than made to order (tailor made).

Therefore, is the presumption and the views/opinion.

Your views of service element is also acceptable where it is made to order.

Regards

S.Ramaswamy


9 Dated: 22-3-2017
By:- KASTURI SETHI

Yes Sir.

Thanks & Regards.

K.L.SETHI


10 Dated: 31-3-2017
By:- M Kings

Thank you all for abundant views!

I am getting readymade uniform and books from my vendors and supplying to schools.. In this scenario only VAT is applicable or service tax also applicable.?


11 Dated: 31-3-2017
By:- KASTURI SETHI

To purchase anything and sell is trading. No service is involved. You are earning profit and not commission. There is a difference between profit and commission. Service Tax is on commission and not on profit. If you consider that you are getting commission, then ST is applicable. Commission agent falls under the category of erstwhile BAS and now under the category of other than negative list. Now you are to decide whether you are getting commission or earning profit.


12 Dated: 31-3-2017
By:- KASTURI SETHI

Trading is exempt.


13 Dated: 1-4-2017
By:- Ganeshan Kalyani

Yes trading is exempted from service tax.


14 Dated: 6-4-2017
By:- M Kings

Thank you all for valuable inputs.


15 Dated: 19-5-2017
By:- Imtionen Mar

Hello sir,

How do we bill schools(any VAT/Service Tax to be included?) when we procure ready-made uniforms from factories with CST inclusive in the factory's invoice?


1

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