TaxTMI 
TaxTMI 
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.
Service Tax on powder coating
11 Aug 2012 
4 Replies 
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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. (AI Summary)
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. (AI Summary)