Liability and applicability of service tax

[shyamal roychowdhury]

My client recived a job work of fabricating garments . He receives all meterials from his client including evn small things necessary for fabrications . He has his own machines & his own tailors who are in his role . The client deducts TDS FROM THE RUNNING BILLS SUBMITTED BY MY CLIENT. Now The clientdo not give sevice tax as he sends the meterials on challan & get back garments through challan.. meterials used & surplus meterials are returned. My client uses the premises of his client . The garments do not attract Excise duty so neither my client nor his clients pays any excise duty or sale tax . Now my query is WEATHER MYCLIENT ANY WAY COME UNDER ANY SERVICE TAX CLAUSE OR HAS HE ANY LIABILTY FOR SERVICE TAX . HE IS NOT EVEN REGISTER WITH SERVICE TAX DEPT .

[Surender Gupta]

There is no service tax on the activity described in the query.

[Madhukar N Hiregange]

The activity maybe covered under BAS as production or processing of goods for or on behalf of the client. However it excludes the manufacture as defined under section 2(f) of Central excise. Fabricationof garmnets i manufacture therrefore not liable.

AI Summary

Service tax on job work garment fabrication may not apply where fabrication amounts to manufacture and goods are client supplied. Whether service tax applies to job work garment fabrication using client supplied materials, premises, labour and machines, with goods moved on challan and not excisable; advisers concluded no service tax, noting the activity may be production or processing for the client but that garment fabrication qualifies as manufacture excluded from excise and hence not subject to service tax in the stated circumstances.