TaxTMI 
TaxTMI 
Rate of service tax on core cutting
13 Jul 2006 
2 Replies 
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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. (AI Summary)
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. (AI Summary)
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?