Consumables in printing job-work are not taxable under works contract law unless property in them passes to the customer.

In job-work printing on paper supplied by customers, works contract tax applies only if property in goods passes to the customer in execution of the contract, whether as goods or in another form. Ink used in printing was treated as a consumable tool of the printer that is consumed in the process and loses its identity, so the customer does not receive ink or any transferable property in it. The value of goods merely used or consumed in the work is not taxable unless that use results in a transfer of property. The issue was decided in favour of the assessee.

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Issues: Whether, in the execution of job-work of printing on paper supplied by customers, there is a transfer of property in ink, either as ink or in any other form, so as to attract tax under the works contract legislation.

Analysis: After the Forty-sixth Amendment and the enactment of the Maharashtra works contract legislation, tax is attracted only where property in goods is transferred to the customer in execution of the contract, whether as goods or in some other form. Ink used in printing is merely a tool of the printer, is consumed in the process, and loses its identity as goods. The customer does not receive ink, nor is the customer concerned with its quantity or cost. The value of goods used or consumed in the work is not taxable unless such use results in a transfer of property to the customer.

Conclusion: There was no transfer of property in ink in the printing job, either as ink or in any other form, and the issue is decided in favour of the assessee.

Ratio Decidendi: Tax under the works contract regime applies only to goods whose property passes to the customer in execution of the contract; consumables that are merely used up in the process without any transfer of property are not taxable.

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