Service Tax on powder coating

[Amit amit]

We are having powder coating plant in Gujarat. We do powder coating on industrial machines,pipes, furniture items. Do we fall in service tax. Also do we fall in Vat . Or in Both.

[Ashok Chopra]

If principal manufacture of machines, pipes and furniture items are paying excise duty on the clearance of these items, no service tax will be charged by you.  If they are not paying duty you are exempted upto Rs. 10.00 lac

[Vijay Chitte]

If Central Excise duty is leviable on a particular process as the same amounts to manufacture then such process would be covered in the negative list even if there is a central excise duty exemption for such process, Also refer  mega exemptions notification  no. 25/2012- ST Point No. 30(d).  Powder coating is a manufacturing process does not chargeble to service tax,

[YAGAY and SUN]

Since service tax is not applicable, VAT in nature of WCT will be applicable.

[Joginder Pal]

I agree with Mr. Vijay Chitte. In fact the question does not reveal full facts as to whaether the unit is registered with Central Excise if so what are the items for which they are registered. If not registered, that means they never treated themselves as manufacturer. Let them examine their facts and examine their case with reference to reply by Mr. Chitte to get the proper reply.

AI Summary

Manufacturing process exclusion: powder coating treated as manufacturing process, not subject to service tax; VAT implications follow.
Whether powder coating attracts service tax hinges on whether the coating is a manufacturing process and the excise treatment of the principal goods; if the principal manufacturer pays excise or the process amounts to manufacture under excise law, the coating is excluded from service tax under the negative list. Absent service tax, state turnover tax or VAT may apply. The unit's central excise registration and factual circumstances must be examined to determine the correct indirect tax treatment.