Trading of goods- service before April 01, 2011

[VINOD KUMAR]

Is trading of goods is classifiable under service or exempted service before April 01, 2011 and whether rule 6 of CCR 2004 is also applicable before April 01, 2011.If so, please quote relevant statutory provisions.

[Madhukar N Hiregange]

It should not be so. However I understand that Tribunals are leaning on saying it is. In fact I understand that at times they are saying that it is proportionate and the 10% formula is not applicable.!!

It is a fact that in providing services more services would be consumed and in manufacturing some amount and in trading very less. The law had recognised that and now understanding that the proportion is less the 10% rule has been introduced.

[VINOD KUMAR]

Thank you sir for your valuable reply.

AI Summary

Trading of goods as service: tribunals sometimes treated trading as taxable service using a proportionate assessment.
Query whether trading of goods before April 1, 2011 was classifiable as a taxable service and whether the Central Excise Rules (2004) allocation provision applied; tribunals were reported to have sometimes treated trading as service using a proportionate, facts-based assessment rather than a fixed percentage, and the later statutory fixed allocation was introduced to address limited service consumption in trading compared with manufacturing or pure services.