Sir,
we have been manufacturing of Automotive Transmission for car under contract manufacturing for our Customer from our Hosur ( TN state ) Plant.TVAT at the rate of 5 percent ( Industrial Input) being paid on the AVTEC Purchase Order Value ( excluding FOC material value). According to sales tax department of TN. We are doing job work therefore VAT at the rate of 14.5 percent , on the sale of said Automobile Transmission, is applicable .
Kindly advise.
Regards
Pradeep Jain
Please provide your opinion.
Dispute Over VAT Rate for Automotive Transmission Manufacturing: 5% vs. 14.5% in Tamil Nadu Contract Work A query was raised regarding the applicable VAT rate for contract manufacturing of automotive transmissions in Tamil Nadu. The manufacturer has been paying a 5% VAT on the purchase order value, excluding free-of-charge materials. However, the Tamil Nadu sales tax department considers the activity as job work, thereby applying a 14.5% VAT rate on the sale of the transmissions. The query seeks advice on this discrepancy. A reply was posted asking if the issue had been clarified, indicating ongoing uncertainty or need for further clarification. (AI Summary)
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