Service Tax on Printing Sarees

[Chetan Manek]

Dear All,

I want to ask hereby that whether Service Tax is applicable on Printing of Sarees?? which is only Intermediate Job Work Does no amount to Manufacture....Raw Sarees was provided by service receiver..

[Kiran Tahelani]

As per Serial No.30(ii)(a) of the Notification No. 25/2012-Service Tax dated 20th June 2012, the said entry is exempt. Therefore prima facie it seems that your activity is exempt from whole of service tax.

 

[Amit Agrawal]

I agree with Ms. Kiran Tahelani.

[KASTURI SETHI]

Are you sure that the process of printing on sarees does not amount to manufacture ? What is the basis of the wording, 'does not amount to manufacture' Of which grey fabric (saree) are you talking of whether cotton or synthetic ?

[KASTURI SETHI]

As per Note No.4 of Chapters 52, 54 & 55 of Central Excise Tariff Act, 1985 and Note No.11 of Chapter 62 of Central Excise Tariff Act, the process of printing on dress material amounts to manufacture.

So the process of printing on grey fabric on job work basis is not covered under the phrase, 'Does not amount to Manufacture'.

Hence examine your query in view of the above reply to take a correct decision.

Your query is very brief. It lacks in full facts of the issue.

[Amit Agrawal]

In continuation of my earlier post, please note the followings:

A. Before 01.06.2015, no service tax was leviable upon "any process amounting to manufacture or production of goods'' in terms of Section 66D (f) read with Section 66 B of the Finance Act, 1994 (32 of 1994).

B. Before 31.03.2017, services by way of "Carrying out an intermediate production process as job work in relation to agriculture, printing or textile processing" were exempted from service tax due to then prevalent Serial No. 30 (a) of Notification No. 25/2012-Service Tax dated 20th June 2012 i.e. Mega exemption notification (i.e. as prevalent before being substituted vide vide Not. 7/2017 - Dated 2-2-2017, with effect from the date on which the Finance Bill, 2017 receives assent of the President i.e. 31.03.2017)

B1. Similarly, before 31.03.2017, "Carrying out an intermediate production process as job work in relation to any goods excluding alcoholic liquors for human consumption,] on which appropriate duty is payable by the principal manufacturer" was exempted from service tax as per then prevalent Serial No. 30 (c) of Mega Exemption Notification.

C. Since 31.03.2017 till 30.06.2017, "services by way of carrying out any intermediate production process as job worknot amounting to manufacture or production in relation to agriculture, printing or textile processing" was exempted (Serial No. 30 (ii) (a) of Mega exemption notification after being substituted vide vide Not. 7/2017 - Dated 2-2-2017, with effect from the date on which the Finance Bill, 2017 receives assent of the President i.e. 31.03.2017).

C1. Similarly, since 31.03.2017 till 30.06.2017, "Services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption' was exempted from service tax as per then prevalent Serial No. 30 (i) of Mega Exemption Notification.

Accordingly, so service tax was payable on subject activity irrespective of the fact that subject job-work process amounted to manufacture or not, in my view.

These are ex facie views of mine, the same should not be construed as professional advice / suggestion.

[Amit Agrawal]

Correction in my last post above:

Please read Para A as follows: Before 31.03.2017, no service tax was leviable upon " services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption'' in terms of Section 66D (f) read with Section 66B of the Finance Act, 1994 (32 of 1994).

[Amit Agrawal]

Please read 'the conclusion' in my post at serial No. 5 as follows:

Accordingly, NO service tax was payable on subject activity irrespective of the fact that subject job-work process amounted to manufacture or not, in my view.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion. & I respect contrary views.

AI Summary

Exemption for intermediate job-work printing: such services are not subject to service tax even if constituting manufacture. Applicability of service tax to saree-printing job work depends on whether printing constitutes manufacture under excise tariff notes and on the wording of the mega exemption notification; one position treats printing on dress material as manufacture, while the prevailing interpretation of the exemption entries indicates such intermediate job-work in printing/textile processing is exempt and therefore not taxable regardless of manufacture characterisation.