TaxTMI 
TaxTMI 
Job work of Conversion of Milk to Skimmed Milk Powder
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....ob work of Conversion of Milk to Skimmed Milk Powder<br> Query (Issue) Started By: - RAJESH SINHA Dated:- 18-6-2016 Last Reply Date:- 21-6-2016 Service Tax<br>Got 3 Replies<br>Service Tax<br>Dear Experts! Our unit is a Dairy Unit and have facility of Conversion of Milk to Skimmed Milk Powder. During conversion, Cream is also separate from Milk. Many Dairy Units are contacting us for such conversi....
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....on. Here, I want to clear the matter about imposing of Service Tax on such jab work. As the Product "Skimmed Milk Powder" is falling in negative list of Excise, and being our unit is a factory, does such type of job work exempt from service tax? Kindly clear it. -------- Rajesh Kr. Sinha (Mob No.-9835229100 / 9128891361 / 7463883911) Reply By Rajagopalan Ranganathan: The Reply: Sir....
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...., Conversion of milk into skimmed milk powder amounts to manufacture under Section 2 (f) of Central Excise Act, 1944. Skimmed milk powder fall sunder sub-heading No. 0102 21 00 of the first schedule of Central Excise Tariff Act 1985 attracting 'Nil' rate of duty. Therefore such conversion on job work basis will not be liable to service tax. Reply By Rajagopalan Ranganathan: The Reply: S....
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....ir, Please read sub=heading as 0402 21 00 and not as 0102 21 00. The typographical mistake is highly regretted. Reply By Ganeshan Kalyani: The Reply: Sir, I totally agree with Sri Rajagopalan Sir, the activity of conversion of 'Skin Milk' into 'Skimmed Milk Powder' amounts to manufacture. After process a new product has emerged and therefore it satisfies the defintion of manufac....
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....ture and is therefore subject to excise duty. Excise duty is NIL.<br> Discussion Forum - Knowledge Sharing ....