Concessional tax for rubber backing work applies where rubber is used as a raw material in manufacture.

A rubber backing activity carried out by a job-worker on polypropaline rubber mats was treated as industrial manufacturing for the concessional tax notification applicable to rubber-based industrial units. Because the unit purchased rubber on its own account and used it as a raw material in the manufacturing process, the resulting rubber-backed mats fell within the notification's explanation covering goods made using rubber in any form. Job-work status did not change the character of the unit for this purpose, and denying the concession would undermine the object of promoting rubber-based industries. The purchase turnover of rubber used in the work was therefore eligible for the concessional rate.

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Issues: Whether a job-worker engaged in rubber backing of polypropaline rubber mats, who purchased rubber on its own account and used it in the manufacturing process, was entitled to the concessional rate of tax under the notification for rubber based industrial units.

Analysis: The notification granted reduced tax where the purchase of rubber was by a rubber based industrial unit and the rubber was used in the manufacture of rubber products within the State. The Explanation treated as rubber products any goods manufactured using rubber in any form as one of the raw materials. The petitioner's activity of rubber backing converted the mats into rubber backed mats and amounted to industrial manufacturing. The fact that the work was done on job-work basis did not alter the nature of the unit as one engaged in manufacturing for the purpose of the notification. Denying the benefit would defeat the object of promoting rubber based industries.

Conclusion: The petitioner was entitled to the concessional rate of tax on the purchase turnover of rubber used in the rubber backing work.

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