Fabrication services provided to exporter

[LAXMIKANT ARORA]

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

Now I want to know the service tax rate and WCT rate applicable in the following case:-

 

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

 

Please refer the relevant notification and section

Thanks

[Madhukar N Hiregange]

When only service provided, there maybe no liability as the processes of manufacture not liable to ST. Garments presently exempted under central excise.

What goods are provided important. If only tread buttons then may not be liable. If substantial then the value of transfer of property liable. 

AI Summary

Service tax liability for fabrication services hinges on whether only services are supplied or substantial goods transfer occurs. Service tax exposure depends on whether only services are supplied or goods are also provided. Processes of manufacture are likely not liable to service tax and ready-made garments are exempt under central excise, so pure fabrication services may not attract service tax. If goods are supplied in a works contract, minor items (such as thread or buttons) may not make the transaction liable, but a substantial goods component will render the value attributable to the transfer of property in goods chargeable.