Powder Coating - Service Tax

[Srivatsan Krishnamachari]

Dear Experts,

Please help in the below issue.

We are doing powder coating work on job work basis. We raise bill for job work charges only and involves our material also for processing the same.

In this transaction, what is the percentage i have consider on the bill value for Service tax payment and for the Sales tax payment.

Thanking you in advance

Srinivas

AI Summary

Classification of powder coating as manufacture determines whether central excise applies or it remains a taxable service.
Whether powder coating constitutes manufacture hinges on whether the process produces a new product with distinct character and use; if so, central excise applies and service tax is not payable. Respondents offered competing positions: powder coating may be treated as manufacture when it alters product identity; others note exemption frameworks and tribunal precedent indicating powder coating does not change identity and is thus a service. Determination depends on material facts, classification principles, exemption notifications, and case law.