Liability of excise or service tax - galvanization

[Chalapathy Rao Marthy]

Dear sir, As per Notification No.22/2002 NT the process of Galvanization amounts to manufacture and also as per Section 65(19) of  Finance Act, 1994, Production or processing of goods on behalf of the client is liable to service tax. With the above background please clarify whether a client who is engaged in galvanization of steel is liable under service tax or excise act.

AI Summary

Galvanization of Steel Classified as Manufacturing, Subject to Central Excise Duty, Not Service Tax per Section 65(19) Finance Act. A query was raised regarding whether galvanization of steel is subject to service tax or excise duty. The response clarified that according to Notification No.22/2002 NT and Section 65(19) of the Finance Act, 1994, processes that qualify as manufacturing under excise law are not subject to service tax. Since galvanization is considered manufacturing, it falls under Central Excise Duty (CED) rather than service tax, with an exemption applicable up to 150 lakhs.