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 applicability on core cutting clarified; job-work, manufacture and excise duty affect liability and registration penalties.
Applicability of service tax to core cutting hinges on whether the work is job work or part of manufacture and whether the final manufacturer pays excise duty; if taxable, the contractor must register, pay tax at the applicable rate, may avail an abatement on gross value under specific notifications, cannot claim input or capital goods credit, and may face penalties for late registration or non-payment.