Category - Business auxiliary services

[Guest]

Our client unit is engaged in the works contract of anodizing and powder coating the aluminium structural supplied by their client in different size and quantity and it has to be done according to the specification of colour selected by the customers. The unit is executing works contract which are chargeable under regular rate of tax @ 4% by virtue of serial no.3 of 6th schedule under Karnataka Vat Act, 2003 with effect from 01.05.2006. The taxes are levied primarily and exclusively on transfer of the property on goods involved in the execution of works contract. Whether such type of activities coming under the purview of BAS under serial no. (v) production of processing of goods for on behalf of the client?

[Madhukar N Hiregange]

in my view this can come under BAS. ON the value of servcie ( gross - amount on which VAT paid) is liable. POssible defense is that in a composite contract no st pyable relying on decision in case of daleim

AI Summary

Clarification sought on whether anodizing and powder coating aluminum structures fall under Business Auxiliary Services for tax purposes. A client unit involved in anodizing and powder coating aluminum structures as per customer specifications is questioning whether these activities fall under Business Auxiliary Services (BAS) for service tax purposes. The unit operates under a works contract taxed at 4% according to the Karnataka VAT Act, 2003. The query seeks clarification on whether the activities are taxable under BAS, specifically under the production or processing of goods on behalf of a client. The response suggests that these activities could be considered BAS, with tax applicable on the service value minus VAT. A possible defense is that no service tax is payable in a composite contract, referencing a legal decision.