Dear Experts,
My client was manufacturers of Control Panels and in addition to provide services to the clients. Now excise audit people called for 4 years of records which relates to 2014-15, 2015-16, 2016-17 & 2017-18. My client had been discharging the excise duty on monthly basis without any default. However, he has not charged service tax on the service charges he collected from the customers since the service tax turnover was not crossed the threshold limit of ₹ 10 Lakhs.
My query is that, whether the client did correct or he needs to discharge the tax on service charges irrespective of the turnover, since the client registered under Excise regime.
Thanks in Advance.
Excise auditors question control panel manufacturer's service tax exemption; experts suggest reviewing notification 33/12-ST and contract terms. A client, a manufacturer of control panels, is under scrutiny by excise auditors for records from 2014-2018. The client has consistently paid excise duty but did not charge service tax on collected service charges, as their turnover did not exceed the 10 lakh threshold. The query seeks clarity on whether service tax should be paid regardless of turnover due to excise registration. Experts advise reviewing notification no. 33/12-ST and examining contract terms, brand name issues, Cenvat credit, and turnover clubbing to determine eligibility for the threshold exemption. Separate criteria for service tax registration from excise are also suggested. (AI Summary)
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