Applicability of service tax registration

[BAL KRISHAN GARG]

Respected Rama Krishna Ji , I would like to give thanks to you firstly for giving the valuable clarification on the issued. Now I will brief the nature of work done by A . A is making Blades for ceiling fans , exhaust fans for B in the premises of B on the sheet provided by B alongwith his labour and B after process completion by A i.e.completion of Blades sold to the various parties after paying of Duty on Blades .Total Work up to date is 7 - 8 Lacs till date . Mr. C approached to A for makiing Blades for C in Baddi in Himachal Pradesh and the same process will be repeated here also as in case of B in delhi .Here C is having Excise Exemption .But C specified the condition that A have to be registered with Service Tax . My Querry is 1. Whether A can apply for Service tax registration for getting the additional work from C ? as C may be in the impression that it is labour supply case and the contractor must be registration with the service tax . 2. If A apply the registration in service tax and do the job work alongwith his labour there in baddi in himachal pradesh on the material provided by C whether the ser.tax provisions apply in the fact citied above . 3. and if you advice that it will attract Notification 8 /2005 and will get the exemption whether A will charge ser.tax on both firm billing or only on the billing made to C which is non excise paying . My understanding may be wrong as I believe that if A is doing Job work on the material provided by B then it will not come under the provisions of service tax as B is paying excise duty on the goods processed by A . But in case of C as C is not paying duty the same exemption will not applicable and he will have to charge ser.tax on the billing made to C in Baddi . Thanks once agains for giving valuable suggestion and clarification . My e-mail id : [email protected]

[Rama Krishana]

Dear Sir, I failed to understand, every time you refer to notification no. 8/2005 without considering the excisability of the product. The making of fan blades must be a excisable commodity (even if exmept from duty of excise)and the same should be out of service tax net as such.

AI Summary

Excisability of goods determines service tax scope: manufacture of excisable fan blades falls outside the service tax net. Manufacture/processing of fan blades on materials supplied by a principal constitutes production of an excisable commodity; where the end product is excisable, that activity is outside the service tax net even if excise duty is currently exempt, so service tax registration and levy are not triggered by the job work per se.