GLOW SIGN AND HOARDING

[Guest]

HI

I JUST WANT TO KNOW, whether making of glow sign and hoarding ( by using own materials) and delivering to clients place ( freight reimbursed) is subject to service tax

i am not in to designing or printing. it is done by outsider aganist valid bill.

not charging any service or labour charge.

vat @ 14.5 is charged to client

charges for fixing board cannot be charged. it is free of cost

is there any specific clause of notification on this

please guide

[KASTURI SETHI]

Sh.Ganesh Ji,

Your activity amounts to manufacture. It falls under Chapter 94.05 (9405.60) of Central Excise Tariff Act. No Service Tax is leviable. SSI exemption of ₹ 1.50 Crore is available. There is one decision of CESTAT which proves that it is a manufacturing activity.One case law is appended below:-

2006 (196) E.L.T. 209 (Tri. - Mumbai) = 2005 (12) TMI 135 - CESTAT, MUMBAI TANZEEM SCREENARTS Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I

 

 

[Ganeshan Kalyani]

Sir, I fully agree with the reply of Sri Kasturi Sir. Apt case law reproduced in his reply. The scenario of the appellant in the case law is same as that of yours. The Hon'ble Tribunal has held that the activity of making glow sign is a manufacturing activity. The appellant was also getting work done from third party as you are carrying out. Hence the case law applies to you and duty is payable. Further you are also to charge VAT, collect it from customer and pay to the Govt. Which you have correctly compiled.

Also see for the benefit of SSI exemption of ₹ 1.50Crores. If your turnover is less than the said amount then no excise duty is applicable. Thanks.

AI Summary

Manufacture classification for glow signs bars service tax and leaves VAT and excise consequences to suppliers. The fabrication and delivery of glow signs and hoardings using the supplier's own materials constitutes manufacture under Chapter 94.05 (9405.60) of the Central Excise Tariff and is not subject to service tax; third party execution does not alter this character. VAT is chargeable on the supply and must be collected and paid by the seller. Central excise duty may apply unless the supplier qualifies for the small scale exemption, and free installation or freight reimbursement does not create a separate taxable service.