SERVICES PROVIDED TO EXPORTER

[LAXMIKANT ARORA]

Dear Sir,

 

A registered service provider has provided fabrication services to an exporter ( who is not an exporting unit in SEZ).

Now I want to know whether these services are exempt or any input refund by the exporter can be claimed or not in the following cases:

 

1. When only services are provided.

 

2. When services are provided as well as goods used  are also provided by the service provider in works contract

 

I also want to know WCT taxability in the abovesaid case.

 

In anticipation for your reply.

 

 

THANKS & REGARDS

[Madhukar N Hiregange]

Fabrication amounting to manufacture- where a new product which is distinct emerges. This could be liable for central excise. exemption is 150 lakhs [ whether the raw material is own or not is not relevant.

When process does not amount to manufacture then ST would be applicable unless one is working under Not.214/86 - where the principal takes the onus of discharging the duty if any.

In WCT the ST would be chargable on the service component- actuals or 40, 60,70 percent as per the type of transaction

[LAXMIKANT ARORA]

Dear sir 

In the case discussed above please tell the service tax rate and WCT rates in fabrication services to exporter in both the cases.

I also request you to state the relevant notification and section of the acts applicable.

 

In anticipation for your reply.

 

AI Summary

Fabrication as manufacture: central excise or service tax applies; WCT charged on service component, with presumptive allocation.
If fabrication results in a new distinct product it is liable to central excise irrespective of raw material ownership; if it does not amount to manufacture, Service Tax applies unless the principal discharges duty under the duty-discharge mechanism. For works contracts or where goods are supplied with services, Service Tax is imposed on the service component measured either by actuals or by presumptive allocations (commonly 40, 60, 70 percent depending on the transaction).