Liability and applicability of service tax

[LAXMIKANT ARORA]

My client recived a job work of fabricating garments . He receives all meterials from his client including evn small things necessary for fabrications . He has his own machines & his own tailors who are in his role . The client deducts TDS FROM THE RUNNING BILLS SUBMITTED BY MY CLIENT. Now The clientdo not give sevice tax as he sends the meterials on challan & get back garments through challan.. meterials used & surplus meterials are returned. My client uses the premises of his client . The garments do not attract Excise duty so neither my client nor his clients pays any excise duty or sale tax . Now my query is WEATHER MYCLIENT ANY WAY COME UNDER ANY SERVICE TAX CLAUSE OR HAS HE ANY LIABILTY FOR SERVICE TAX . HE IS NOT EVEN REGISTER WITH SERVICE TAX DEPT .

AI Summary

Garment Fabrication Process Not Liable for Service Tax Due to Manufacturing Classification Under Central Excise Act. A client engaged in garment fabrication receives materials from their client and uses their own machines and tailors. The client deducts TDS from bills but does not pay service tax, as materials are exchanged via challan. The garments are not subject to excise duty, and neither party pays it. The query concerns whether the client is liable for service tax. Responses indicate that since the process is considered manufacturing under the Central Excise Act, it is not subject to service tax. Exemptions under specific notifications mean no excise or service tax is due, provided conditions are met.