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

Manufacture not a service: garment fabrication on job work excluded from service tax, subject to excise exemption conditions.
The contractor's fabricating activity using principal supplied materials and premises constitutes manufacture of ready made garments under Chapter 61 and thus is excluded from service tax under the negative list; applicable central excise notifications may exempt such goods where conditions (including non claim of cenvat credit) are met, so the job worker ordinarily has no service tax liability while excise treatment remains the material owner's responsibility.