Re-Rubberising on roller

[Narendra Soni]

Dear Experts,

We sent roller for re work, the supplier gringing the roller and re-rubberising on the roller and sent back us. He charged VAT @5% on total bill amount, we deduct TDS u/s 194C. we received enquiry from service tax deptt.

Please advise whether any service tax is applicable?, whether we should not deduct TDS.

URGENT please.

AI Summary

Service tax on re-rubberising: repair or works contract treatment determines VAT on materials and service tax on the service portion.
Re-rubberising a roller that amounts to repair, reconditioning or job work is not manufacture and is taxable as a service; if transfer of rubber is part of the contract, the transaction may be treated as a works contract with VAT on the material element and service tax on the service element. Valuation rules permit excluding material value or applying a presumptive service portion where segregation is impracticable. TDS obligations under income tax are separate and do not affect service tax liability.