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 thenegative 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 andSUN]

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

Powder Coating Plant Tax Inquiry: Exempt from Service Tax if Excise Paid; VAT Applies as Works Contract Tax A company operating a powder coating plant in Gujarat inquired about their liability for service tax and VAT. One response clarified that if the principal manufacturers pay excise duty, the company is exempt from service tax. Another noted that powder coating, being a manufacturing process, falls under the negative list and is not subject to service tax, referencing a specific exemption notification. It was also mentioned that if service tax is not applicable, VAT in the form of Works Contract Tax (WCT) would apply. A final comment suggested verifying registration with Central Excise to determine tax obligations accurately.