Is washing of clothes (laundry service) a taxable service

[pankaj Kannaujiya]

Iam a student of CWA,  and owner of our family business of laundry service,I know that DRYCLEAN SERVICE is a taxable service but we provide only laundry service including Iron of clotheswe contract in hotels & restaurant and another places, so turnover is more than 8 lacs in every year,

please tell me that IS LAUNDRY SERVICE COVERED UNDER TAXABLE SERVICE IN SERVICE TAX ACT,

 regards

pankaj kannaujiya 

surat

[CA Rachit Agarwal]

As per Section 65(105)(zt), dry cleaning service is within the ambit of service tax. "Dry Cleaning" includes dry cleaning of apparels, garments textile, fur or leather articles;

Going though the general meaning dry cleaning means cleaning of clothes using solvent rather than water.Meaning of dry-cleaning has inclusive definition and inclusive word has been explained with reference to the articles.

Hence in our view cleaning of clothes using water and ironing the same would not be covered within the ambit of service tax. Further ironing of clothes does not cover under the dry-cleaning service.

[CASeetharaman KC]

In any case you need to take registration only after your turnover exceeds Rs 9 lakhs. Also only the dry cleaning service is included. It does not seem that the traditional "Dhobi" has been included in the ambit of service tax

AI Summary

Dry cleaning service: washing with water and ironing generally fall outside service tax coverage; registration depends on turnover. The statutory definition confines taxable dry cleaning service to cleaning by solvent rather than water, so routine washing with water and ironing are not covered; registration and tax liability arise only if annual turnover exceeds the prescribed threshold for service providers.