The over seas supplier company(X) is supplying their product(tools) to various Indian companies/Buyers (Manufacturers). The X company has made a contract agreement with Indian Company i.e., A who is a job worker to make the tool for reconditioning is charging reconditioning charges in USD (A to X).
The A Company is using their imported inputs (availing CVD) in connection with reconditioning process. How to comply under Central Excise and as well as Service Tax.
Awaiting yr response at the earliest.
Jagadesh
Reconditioning Tools Not Manufacturing, Attracts Service Tax; Small-Scale Exemption Limit Applies Per Notification No.33/2012-ST. An overseas supplier, Company X, supplies tools to Indian manufacturers and has contracted Indian Company A to recondition these tools. Company A charges reconditioning fees in USD and uses imported inputs, availing CVD for the process. The query seeks guidance on compliance with Central Excise and Service Tax. The response clarifies that reconditioning is not considered manufacturing, thus attracting Service Tax. Company A must pay this tax on reconditioning charges, benefiting from a small-scale exemption limit of 10 lakhs as per Notification No.33/2012-ST dated 20.6.2012. (AI Summary)
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