Rate of service tax on core cutting

[paresh zatakia]

a contractor is doing core cutting (breaking RCC contructions) with drilling and other quipments.what should be rate of service tax? In sept04,because of lack of clarity,he did not take reg.but he took r.c. in June05. Whether he is liable to any penalty?

[Surender Gupta]

For levying service tax on Job Work certain conditions must be satisfied. If it is amount to manufcture, there is no service tax. If final manufacturer is paying excise duty, again service tax is not payable. Otherwise service tax is payable. If you have not taken registration and paid service tax in time, you are liable for penalty also.

[Madhukar N Hiregange]

The rate of ST upto 18th April 2006 is 10.2% and therefater 12.24%. He can avail the exemption of 67% on gross value under 15/2004 and 1/2006. He would not be eligible for credit on inputs, captial goods and input servcies.

AI Summary

Service Tax on Core Cutting: Rates, Exemptions, and Penalties Explained; No Input Credit for Contractors A contractor inquired about the service tax rate for core cutting services and potential penalties for late registration. The first response clarified that service tax is not applicable if the job work amounts to manufacturing or if the final manufacturer pays excise duty. Otherwise, service tax is payable, and late registration incurs penalties. The second response stated the service tax rate was 10.2% until April 18, 2006, and 12.24% thereafter, with a 67% exemption on gross value available under specific notifications. The contractor is not eligible for credit on inputs, capital goods, and input services.